Sporting house prices continued their post-lockdown recovery in August, notching up their highest monthly climb in more than 16 years, says the Nationwide.
“House expenses have now reversed the losses recorded in May and June and are at a new all-time high,” conjectured its chief economist, Robert Gardner.
Prices rose by 2% after month, it said, taking the average price to £224,123.
However, forecasters reckon on a drop in prices again when the economic impact of the virus is have a hunch on jobs.
This is likely to coincide with the easing of pent-up required from lockdown, which is part of the reason for the latest rise in bounties.
Market rebound
The Nationwide said the recovery in housing market pursuit had been “unexpectedly rapid”.
It said the increase in August was the highest since February 2004, when shelter prices rose by 2.7%. As a result, annual house price intumescence accelerated to 3.7%, from 1.5% in July.
Rival mortgage lender, the Halifax, had already proffered a similar rise in prices over the summer.
The recent increase in charges has been the result of a range of factors, including demand carried over from lockdown or brought forward owing to the temporary suspension of earmarks duty for some homes in England and Northern Ireland. In addition, the gang of sales is still comparatively low, making prices more volatile.
First-time consumers will not welcome any rise in prices, and many will struggle with fastening a mortgage as lenders tighten their criteria for offering a loan.
Anyone unfit to offer a relatively large deposit and whose job is a risk amid the remunerative effects of the virus is likely to find it harder to get a home loan than rather than the outbreak.
“This rebound reflects a number of factors. Pent-up call for is coming through, where decisions taken to move before lockdown are progressing,” weighted Mr Gardner.
He added that “behavioural shifts” could be boosting undertaking, with people reassessing their housing needs after memoirs in lockdown.
“These trends look set to continue in the near term, accessory boosted by the recently announced stamp duty holiday, which pleasure serve to bring some activity forward.
“However, most forecasters presume labour market conditions to weaken significantly in the quarters ahead as a be produced end of the after-effects of the pandemic and as government support schemes wind down.
“If this rise to pass, it would likely dampen housing activity once again in the dwelling-places ahead.”
The government’s official forecaster, the Office for Budget Responsibility, has foretold house price falls, particularly next year.
The Resolution Organizing think tank has warned that these predicted price withdraws could lead to some existing owners becoming trapped by nullifying equity – when the property is worth less than the mortgage fastened on it.
‘Bad dream’
Market commentators said the short-term boom in the market had been amazing, but many do not expect it to last.
Lucy Pendleton, director of estate intermediaries James Pendleton, said: “Buyers emboldened by the stamp duty gala have been engaged in a pitched battle for property, delivering a barnstorming retrieval for the market.
“A stunning proportion of properties are now going for asking price or diverse, and offers are flooding in. It’s like lockdown was a bad dream.”
But Andrew Montlake, by director of mortgage broker Coreco, said: “Two words: reality damper. As strong as the property market is right now, it will not last.
“Demand is understandably persuasive after lockdown and the added bonus of the stamp duty holiday, but unemployment is start by the day and the economic outlook is highly uncertain as the furlough scheme ends.
“In the sure months of the year we will start to see a reversal in the current rate of billet price growth.”
The figures were published as the UK’s biggest housebuilder, Barratt, influenced its pre-tax profit fell 46% to £491.8m in the year to the end of June.
It completed 5,252 fewer homes than the whilom year, a drop of 29%, as building sites were forced to secure for weeks during the pandemic. However, it said forward sales were more unmitigated.
