According to Nationwide Building Society, house prices in the UK sped up in August, with values now 13% higher than pre-pandemic levels.
Nationwide say that annual house price growth increased to 11%, with the average cost of a home at £248,857.
Records show the second largest month-on-month increase for property prices in 15 years, with a rise of 2.1%.
The building society say the rise is “surprising”, since the stamp duty holiday benefits reduced in parts of the UK at the end of June.
This led to thousands of deals rushing through to try and beat the deadline.
The tax breaks resulted in significant movement at the higher end of the market.
Chief economist at Nationwide, Robert Gardner, says strong demand came from those buying properties costing between £125,000 and £250,000. This is because some stamp duty savings still existed in areas of the UK. However, he says it is harder to predict what will happen towards the end of the year. He thinks it most probable that activity will slow for a time after the stamp duty holiday ends at the close of September.
Why the rise?
But recent reports from a think tank suggest it is “wide of the mark” to imply the stamp duty holidays were the main driver for prices to rise.
Resolution Foundation say other pandemic related factors had an impact. This includes low interest rates and people’s change in preferences continuing to push prices up.
The Treasury say that stamp duty holidays stimulated the housing market, which helped to protect jobs.
Another key factor in the housing market causing an increase in prices, is the shortage of homes for sale that match demand in a lot of areas. Property website Rightmove say one big example of this is Newmarket, in Suffolk. Here, a 49% drop in new sellers in the marketplace could not meet the surge in sales.
Rightmove’s director of property data, Tim Bannister, says: “The combination of fewer sellers coming to market and sustained demand has resulted in a summer seller shortfall”. Agents now have a challenge ahead of them to “try and replenish the stock to meet the demand from buyers”.
According to Mr Bannister, the average number of available homes for sale on the website per agent has now fallen from 29 in July last year to 16.
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