House prices increased last month by 2% and are now increasing year-on-year by 3.7%, extraordinary figures from the Nationwide published this morning show.
This is the highest monthly rise February 2004, pushing up the average price of a house to £224,123 from £220,935 in July as the annual rate of increase has more than doubled in a month as demand for homes outstrips supply in many areas of the UK.
Nationwide says momentum has returned to the housing market and its house prices research shows it has recovered fully from the Covid-induced downturn in prices during the pandemic lockdown.
“Pent up demand is coming through where decisions taken to move before lockdown are progressing,” says Robert Gardner (left), Nationwide’s Chief Economist.
“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.
“Moreover, social distancing does not appear to be having as much of a chilling effect as we might have feared, at least at this point.
“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.”
Industry reaction so far
David Westgate (left), Group Chief Executive at Andrews Property Group, says: “Right now, activity in the UK property market is off the Richter scale.
“A rebound was always likely after lockdown but the level of transactions and people seeking to move is phenomenal. Properties in the most sought-after areas prices are going through the roof.”
Anthony Codling (right), CEO of Twindig, says: “The increase may reflect a growing divide in the housing market between the COVID rich and the COVID poor, with the financially secure being able to move as usual whilst others are unable to either secure a foothold on the housing ladder or climb up it.”
James Forrester (left), MD of Midlands agency Barrows and Forrester, comments: “This is the latest in a long line of data-based reports that show the market has turned quicker than a pint of milk in the mid-day sun, rebounding from the depths of pandemic decline seen early in the year to return to very good health, all things considered.”
Lucy Pendleton of London agency James Pendleton (right): “Buyers emboldened by the stamp duty holiday have been engaged in a pitch battle for property, delivering a barnstorming recovery for the market.
“A stunning proportion of properties are now going for asking price or more, and offers are flooding in. It’s like lockdown was a bad dream.
Marc Von Grundherr (left) of London agency Benham & Reeves, adds: “The demise of the UK property market has been greatly over prophesied in recent months and these latest figures are yet further proof that it will take far more than a period of muted activity to alter its impenetrable nature.”