House prices were 5.2% higher compared with August 2019, pushing the average price of a property to a record £245,747
U.K. property prices reached a record high for the second consecutive month in August, a drastic turnabout from the four straight months of declines recorded in the country in the spring, according to the latest index released Monday from Halifax.
The housing market’s emergence from the coronavirus doldrums has been given extra fuel from Chancellor of the Exchequer Rishi Sunak’s decision to temporarily waive the tax on the first 500,000 pounds of any property purchase. The outlook remains uncertain, though, as the economic hit continues to take hold and joblessness expected to surge.
Prices last month clocked in at 5.2% above August 2019’s figures—the strongest level of annual growth recorded since late 2016—and pushed the average price of a property to a record £245,747.
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, Russell Galley, managing director at the bank and mortgage provider, said in the report.
The government’s stamp duty holiday, enacted in early July and in effect until March 31, 2021, could save buyers as much as almost £15,000 in tax when purchasing a home.
Despite the variety of factors underpinning prices currently, such a degree of price inflation is unlikely to be sustained, according to Mr. Galley.
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, he said. We do expect greater downward pressure on house prices in the medium-term.
