Its latest house price index revealed an annual rise of 3.8% which Halifax said was the highest it had ever been since the index began.
Meanwhile, average prices also increased by 1.6% in July compared to June. Russell Galley, managing director at Halifax, said: “The latest data adds to the emerging view that the market is experiencing a surprising spike post lockdown.
“As pent-up demand from the period of lockdown is released into a largely open housing market, a low supply of available homes is helping to exert upwards pressure on house prices.”
Halifax said evidence from households and agents suggested confidence was growing and the housing market looked ‘brighter’ than many had expected.
Indeed, Marc von Grundherr, director of London lettings and estate agent Benham and Reeves, said Halifax’s data offered yet further signs of a market returning to good health.
He added: “These figures may have been met with surprise just a few months ago, but this is no longer the case given the monumental shift in buyer sentiment and the dramatically different market we now find ourselves in.”
Challenging times
Others, however were taking a more cautious view of the figures. There were concerns about how the market might look in the autumn when the furlough scheme ended and unemployment threatened households.
Miles Robinson, head of mortgages at online mortgage broker Trussle, said: “We’re living in a time where many people’s finances have been impacted and household finances are stretched, so any growth we’re seeing now could well be short-lived.”
Many in the mortgage industry were concerned about how this boom would impact first-time buyers and Robinson suggested these figures may not come as good news to those embarking on their first home purchase.
“First-time buyers are facing challenging times,” he said.
“Not only do rising house prices mean they will now be getting less for their money, but this comes alongside a shrinking range of high loan-to-value products available, increasing costs for mortgages and intensifying scrutiny from lenders.
“The impact is that many first-time buyers may feel locked out of the market. In recent weeks we’ve seen some lenders reintroduce higher LTV products. We hope this trend continues as more support for first time buyers is desperately needed.”
