Average home prices in the United Kingdom rebounded in August to mark the second-largest gain in 15 years, following the decline in the previous month.
Source: National Building Society
IUKP is up 0.95%
Average home prices stood at £248,857 in August, up from £244,229 in July and £224,123 in August 2020. Month-on-month price growth rose to a 15-year high of 2.1% from -0.6% in July, while annual price growth increased to 11.0% from 10.5%.
Nationwide Chief Economist Robert Gardner said the figures were surprising, considering that England started tapering its stamp duty relief at the end of June. Demand is likely driven by buyers of lower-priced properties and lack of supply.
Demand is expected to stand firm in the near time, given the rebound in confidence and low borrowing costs, along with the lack of market supply. Buying activity is likely to ease when stamp duty holidays lapse in end-September.
House prices have only been modestly impacted by energy efficiency, with properties more energy-efficient attracting a modest premium compared with other similar properties. This is likely to change gradually amid the UK’s push to go green.
Underlying demand is predicted to decline by the latter part of 2021 should unemployment increase as the government winds down support.