Newly released data from Halifax has revealed that average UK house prices have rebounded further to hit a record high of £245,747 in August – an unexpected rise of 1.6% against July.
According to the data, during the latest quarter (June to August) house prices were 1.3% higher than in the preceding three months (March to May) and 5.2% higher than in the same month a year earlier.
Uncertainty remains with likely greater downward pressure on prices in the medium term.
Halifax found that mortgage approvals have returned to pre lockdown levels. Bank of England figures show that the number of mortgages approved to finance house purchases was 66,281 in July 2020 – this represents a rise of 66% from June. Year-on-year, the July figure was 1% below July 2019. Source: Bank of England, seasonally- adjusted figures)
Russell Galley, Managing Director, Halifax said, “House prices continued to beat expectations in August, with prices again rising sharply, up by 1.6% on a monthly basis. Annual growth now stands at 5.2%, its strongest level since late 2016, with the average price of a property tipping over £245,000 for the first time on record.
“A surge in market activity has driven up house prices through the post-lockdown summer period, fuelled by the release of pent-up demand, a strong desire amongst some buyers to move to bigger properties, and of course the temporary cut to stamp duty.
“Notwithstanding the various positive factors supporting the market in the short-term, it remains highly unlikely that this level of price inflation will be sustained. The macroeconomic picture in the UK should become clearer over the next few months as various Government support measures come to an end, and the true scale of the impact of the pandemic on the labour market becomes apparent.
“Rising house prices contrast with the adverse impact of the pandemic on household earnings and with most economic commentators believing that unemployment will continue to rise, we do expect greater downward pressure on house prices in the medium-term.”
Lucy Pendleton, property expert at independent estate agents James Pendleton added, “Another week, another record high.
“Storming house price growth like this will feel more like a lottery win for some homeowners, particularly those approaching retirement or looking to downsize in the near future. Only four months ago they would have had good reason to have lost heart.
“This confirms the red hot finish to the summer suggested by the Nationwide last week and the typically more bullish Halifax index hasn’t disappointed.
“The market is flirting with four-year highs and the Indian summer continues, with buyers and sellers continuing to beat a path to estate agents’ doors.
“First-time buyers won’t necessarily celebrate hurtling growth like this but it is the country’s biggest driver of consumer confidence right now. Borrowing is still cheap and those missing out because of tightening lending criteria are too few to slow this market down.
“The stamp duty holiday remains the icing on the cake that has focused the minds of those looking to move and get on the ladder, but it also remains the main source of hesitation when trying to predict whether this rebound will continue at this pace into next year.”
Leave a Comment