16 Year high
Post-lockdown house prices continue to recover
with 16 year high.
Figures released from the UK’s largest lender, Nationwide, reveal that house prices have continued to rise, post lockdown, with August seeing the highest monthly rise in more than 16 years.
With a 2% rise in the month of August, the lenders chief economist stated that the losses recorded in May and June had been reversed and are now at a new all-time high. The average house price in the UK is now £224,123.
Many experts believe the current trend is due to pent-up demand from lockdown, with homeowners reconsidering their current location and lifestyle. As the Furlough scheme ends in October, forecasters expect a drop in prices again when the economic impact of the virus is felt on jobs.
The Nationwide said the increase in August was the highest since February 2004, when house prices rose by 2.7%. As a result, annual house price growth accelerated to 3.7%, from 1.5% in July.
As we highlighted on last month’s magazine, First-time buyers (FTBs) will not welcome any rise in prices, as lenders are already making criteria to secure a loan (mortgage) more difficult.
In the September issue, we identified how mortgage lenders are asking for a much larger deposits in order to counter any issue with repayment due to a change in the borrowers
Rival lender, the Halifax, confirmed the Nationwide’s findings with their own set of results. A spokesperson for the company said: "These trends look set to continue in the near term, further boosted by the recently announced stamp duty holiday, which will serve to bring some activity forward.
"However, most forecasters expect labour market conditions to weaken significantly in the quarters ahead as a result of the after-effects 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."
The government's official forecaster, the Office for Budget Responsibility, has predicted house price falls, particularly next year.