August proved to be a bumper month for the property market with the latest figures showing prices soared 5.2% annually.
According to the Halifax House Price Index, published today, prices went up by 1.6% in August compared to July but they also increased over the quarter (June to August) by 1.3%.
The 5.2% growth over the year, however, was described by Russell Galley, managing director at Halifax, as the strongest level since late 2016.
It means the average house price in the UK is now at £245,747.
The data from Halifax comes less than a week after Nationwide said prices had reached an ‘all time high’ in August.
Like Nationwide, Halifax attributed the dramatic growth to pent up demand following lockdown and the stamp duty holiday.
Lucy Pendleton, property expert at independent estate agents James Pendleton, said: “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.”
But many industry experts were urging caution and warned this kind of growth was not sustainable.
Indeed, Russell Galley at Halifax said it was ‘highly unlikely’ this level of price inflation would continue particularly as government support measures such as the furlough scheme were due to come to an end in October.
“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,” he added.
First-time buyers
There were also concerns that while many would benefit from the house price increases, there were others for whom the inflation would cause challenges.
Alan Cleary, group managing director at OneSavings Bank for mortgages, said: “It’s good to see the housing market leading the economy out of the deep freeze and with house prices having reached record highs in August, it clearly shows that the Stamp Duty holiday is working as intended.”
He added: “The withdrawal of 90% LTV mortgage deals from the market may see confidence waver at the bottom end of the market, particularly for first-time buyers and those with smaller deposits however there are still deals to be made.
