UK house prices rise £ 5,000 in August.
During August, there was an increase of 2.1% in prices nationwide.
UK house prices rose by almost £ 5,000 in August as the property market continued to boom after the partial end of the government stamp tax holiday in England and Northern Ireland.
The Nationwide Construction Society said the cost of an average home had risen by £ 4,628 to £ 248,857, a 2.1% monthly increase and the second-highest in 15 years.
Despite expectations that house price inflation will decline after the threshold for paying stamp duty was lowered from £ 500,000 to £ 250,000 in July, year-on-year property inflation rose to 11% in August. Compared to 10.5% in the previous month.
Nationwide attributed the market strength in August to a lack of properties for sale and buyers of homes worth less than £ 250,000 seeking to complete purchases before the stamp duty threshold reverts to its pre-crisis norm from £ 125,000 in October.
Record low-interest rates, demand for more spacious properties during the pandemic and incentives provided by Chancellor Rishi Sunak have meant that the median house price in the UK has risen 13% since the start of the crisis 18 months ago.
The average house prices recovered 11% compared to July.
Last month’s house price rise followed a brief July contraction when home sales fell two-thirds after the government cut tax breaks for new buyers. Nationwide said price growth had contracted 0.6% before the August rally.
Robert Gardner, a chief economist at Nationwide, said: “The rebound in August is surprising because it seemed more likely that the reduction of stamp duty relief in England at the end of June would take some of the heat out of the market.”
He said the increase might reflect strong demand from those buying a property priced between £ 125,000 and £ 250,000, hoping to take advantage of the stamp duty relief before it ends, combined with a low number of properties on the books of the real estate agents.
Nationwide expects the upward trend in property prices to continue in the near term due to a rebound in consumer confidence coupled with a limited supply of properties. However, the outlook for the real estate market at the end of the year is “still cloudy”.
He said the real estate market activity would slow “almost inevitably” when the stamp tax holiday ends at the end of the month. Real estate demand could stagnate if the end of the year brings a surge in unemployment as schemes government support comes to an end.
“But even this is far from assured,” Gardner said. “The labour market has remained remarkably resilient to date and, even if it weakens, there is scope for changes in house prices preferences as a result of the pandemic to continue to support activity for some time to come.”
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