House prices jumped the further in one month for more than two and a half years in August, according to Nationwide Building Society.
According to its house price index for August, prices increased by 1.3 per cent, the largest one month increase since January 2010 and reverses declines which occurred in the two previous months.
However, the average price of £164,729 is still down 0.7 per cent compared to August 2011.
Nationwide’s chief economist Robert Gardner said: “Given the difficult economic backdrop, the extent of the rebound in August is a little surprising. However, we should never read too much into one month’s data, especially since monthly price changes have been impacted by a number of one-off factors this year, such as the ending of the stamp duty holiday for first time buyers. These are factors that cannot be controlled by the usual process of seasonal adjustment.
“Nevertheless, the fact that the annual pace of house price decline moderated to -0.7 per cent in August from -2.6 per cent the previous month provides evidence that conditions remain fairly stable.
“This may be explained by the surprising resilience evident in the UK labour market, with further increases in employment in recent months, even though the UK economy has remained in recession.”
Legal and General Mortgage Club managing director Ben Thompson added: “This is much needed and timely news for homeowners. This may even serve as a gentle nudge to those currently renting who feel no urgency to buy at the moment. With renting on a national basis now more expensive than buying, we would ordinarily expect some tenants to now look to buy.
“Consumer confidence does though remain low and real first time buyer mortgages are harder to get than they used to be, so we are not yet into a normal recovery phase.”
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