UK house prices at all-time high

UK house prices at all-time high

UK house prices at all-time high

According to a report published by Nationwide, August saw UK house prices reach their highest monthly rise in over 16 years.

Despite the losses recorded in previous months, a “unexpectedly rapid” post-lockdown recovery has seen prices rise by 2%, with the average house price rising to £224,123.

The increase is being attributed to a number of factors, including demand carried over from lockdown or the temporary suspension of stamp duty for some homes in England and Northern Ireland.

However, the number of sales is still comparatively low, making the market more volatile.

Robert Gardner, Chief Economist at Nationwide, said:

“House prices have now reversed the losses recorded in May and June and are at a new all-time high.

“This rebound reflects a number of factors. Pent-up demand is coming through, where decisions taken to move before lockdown are progressing.

“These trends look set to continue in the near term, further boosted by the recently announced stamp duty holiday, which will serve to bring some activity forward.

“However, most forecasters expect labour market conditions to weaken significantly in the quarters ahead as a result of the after-effects of the pandemic and as government support schemes wind down.

“If this comes to pass, it would likely dampen housing activity once again in the quarters ahead.”

This recent increase is the highest recorded since February 2004, when house prices rose by 2.7%.

As a result, annual house price growth accelerated from 1.5% to 3.7%.

The Office for Budget Responsibility, has predicted that house price will fall again next year.

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