UK house price rises accelerate in August
The housing market in England and Northern Ireland continued to grow in August, with average house prices rising by almost £5,000 as the government's stamp duty exemption in England and Northern Ireland came to an end.
The value of the average property climbed to £248,857 - a rise of £4,628 and a monthly increase of just over 2%. This is the second highest increase in 15 years, according to Nationwide.
Experts had forecasted a slowdown in the inflation of property prices as a result of stamp duty tax breaks being eased in July. However, August saw year-on-year house price inflation rise by 11% - a 0.5% increase from the month before.
Nationwide’s chief economist, Robert Gardner, said: “The bounceback in August is surprising because it seemed more likely that the tapering of stamp duty relief in England at the end of June would take some of the heat out of the market.”
Nationwide said that it expected property prices to continue rising in the short-term, but that activity will “almost inevitably” begin to ease when the stamp duty tax breaks end later this month.
“But even this is far from assured,” said Gardner. “The labour market has remained remarkably resilient to date and, even if it does weaken, there is scope for shifts in housing preferences as a result of the pandemic to continue to support activity for some time yet.”
Knight Frank’s head of UK residential research, Tom Bill, said: “The housing market has clearly lost none of its core strength, and rising business confidence and rock-bottom interest rates signal a strong end to the year, even as the stamp duty holiday winds down completely.”
Lucy Pendleton, of estate agent James Pendleton, said: “This is a timely lesson that it’s the fundamentals of the market that are all-powerful still. Sunak’s generous state handout has turned out to be more a demonstration of misdirection than crisis management.
“The market didn’t need his money and, with hundreds of billions tucked away in accidental savings, Britons are continuing to satisfy a deep-seated determination to move after a traumatic 18 months.”