September 2, 2020 @ 11:31 by Richard Dawson
House prices in the UK have reached a new all-time high in an “unexpectedly rapid recovery” from the coronavirus pandemic recession.
New figures released by Nationwide Building Society show that annual house price growth picked up to 3.7 per cent in August.
Since falling by 1.6 per cent in both May and June this year, house prices have surged back month-on-month with 1.8 per cent growth in July and now, 2 per cent in August.
The average cost of a home in the UK is now £224,123 – a new all-time high and substantially higher than the £216,096 figure recorded this time last year.
The rapid bounce back is the result of a number of factors such as pent-up demand coming through, behavioural shifts as people reassess their housing needs and of course the easing lockdown restrictions.
The recent changes to stamp duty land tax are also thought to be incentivising more activity in the housing market.
Robert Gardner, Nationwide’s chief economist, said: “UK house prices rose by 2.0 per cent in August, after taking account of seasonal effects, following a 1.8 per cent rise in July.
“This is the highest monthly rise since February 2004 (2.7 per cent). As a result, annual house price growth accelerated to 3.7 per cent, from 1.5 per cent last month.
“House prices have now reversed the losses recorded in May and June and are at a new all-time high.
“The bounce back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions.
“Our own research, conducted in May, indicated that around 15 per cent of people surveyed were considering moving as a result of lockdown.
“Moreover, social distancing does not appear to be having as much of a chilling effect as we might have feared, at least at this point.
“However, most forecasters expect labour market conditions to weaken significantly in the quarters ahead as a result of the aftereffects 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.”