House prices shrug off Covid-19 worries to hit all-time high
The cost of a house in the UK rose by a little over £3,000 in August as the property market hit new highs.
House-buyers have shrugged off continued uncertainty in the economy and social distancing to send the average price of a home to £224,123.
The 2% rise in August of £3,188 wiped out the losses made earlier this year as the pandemic tore through the country, according to data from building society Nationwide.
Our own research, conducted in May, indicated that around 15% of people surveyed were considering moving as a result of lockdown.
It is also the highest rise in a single month since February 2004, when prices jumped 2.7%.
“The bounce-back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions,” said Nationwide chief economist Robert Gardner.
“This rebound reflects a number of factors. Pent-up demand is coming through, where decisions taken to move before lockdown are progressing.
“Behavioural shifts may also be boosting activity, as people reassess their housing needs and preferences as a result of life in lockdown.
“Our own research, conducted in May, indicated that around 15% of people surveyed were considering moving as a result of lockdown.”
Meanwhile, official figures from the Office for National Statistics (ONS), also released on Wednesday, showed house prices increased by 0.2% in May, compared with the month before.
The ONS and the Land Registry said the average price at which a home was sold reached £236,000 during the month, after decreasing 0.2% in April.
It is a £7,000 rise on the same month last year.
The holiday in stamp duty means that this trend is likely to continue in the near term, but Mr Gardner warned that a massive rise in unemployment, which is forecast by most experts, would probably send the housing market back into a slump.
Chris Sykes, at mortgage broker Private Finance, said that as government protections for renters come to an end, more properties could start hitting the market.
“The ending of the Government’s eviction ban in September could lead to a surge in landlords trying to remove tenants from properties,” he said.
“This may cause a great deal of negative publicity, possibly suppressing appetite for new buy-to-let purchases.
“Landlords may even sell some of their properties to avoid potential difficulties moving forward.”