Prices last month stood at £248,857, according to mortgage lender Nationwide, and are now around 13% higher than when the pandemic began.
August’s figure was up 2.1% on the prior month and 11% above what was recorded in August last year when the market was boosted by the government allowing the first £500,000 spent on a property to be tax free.
That tax break was scaled back from July 2021, and the threshold for the stamp duty holiday is £250,000 until September 30.
There was a 10.5% annual rise and 0.6% monthly increase in July prices, and Robert Gardner, Nationwide’s chief economist, said: “The bounce back in August is surprising because it seemed more likely that the tapering of stamp duty relief in England at the end of June would take some of the heat out of the market.”
Gardner pointed to there potentially being strong demand from those still taking advantage of the less generous stamp duty holiday. He also said a lack of supply on the market could also have contributed to last month’s jump.
He said: “Underlying demand is likely to remain solid in the near term. Consumer confidence has rebounded in recent months while borrowing costs remain low.”
But Gardner cautioned: “As we look towards the end of the year, the outlook is harder to foresee. Activity will almost inevitably soften for a period after the stamp duty holiday expires at the end of September. Moreover, underlying demand is likely to soften around the turn of the year if unemployment rises.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “As we head into autumn, we expect more of the same for now. With lenders reducing rates across loan-to-values, and not just for those with the biggest deposits, there are opportunities for first-time buyers and home movers alike.”
Anthony Codling at property analysis firm Twindig, said: “The strong house price performance during August could, however, be one last hurrah before the stamp duty holiday draws to a close …. However, house prices have been stronger than we ever imagined in the eye of the pandemic and it will be a brave person who bets against them as we start to leave the storm of the pandemic behind.”
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