Skip to main content

News | Business UK Economy: UK house prices see biggest jump since 2016 to hit fresh high – but it won’t last long, say property experts

Vicky McKeever




Matt Cardy | Getty Images News | Getty Images
U.K. house prices saw their biggest growth since 2016 in August, climbing to a record high, according to Britain’s longest-running barometer of the property market.
The Halifax House Price Index, which is run by analysis company IHS Markit, found that U.K. house prices grew by 5.2% in August compared to the same month last year. It marks the strongest annual growth in prices since the end of 2016.
The price of the average U.K. house hit £245,747 ($324,241) – the first time on record that prices have surpassed £245,000. It represents month-on-month growth of 1.6% from July to August, a touch higher than the 1.5% growth forecasted by economists in a Reuters poll.
Russell Galley, managing director at Halifax, said the surge in property market activity had driven up house prices as coronavirus lockdown measures eased in the summer months.
This had been “fueled by the release of pent-up demand, a strong desire amongst some buyers to move to bigger properties, and of course the temporary cut to stamp duty,” he said in a statement.
In July, U.K. Finance Minister Rishi Sunak announced a holiday from property tax, known as stamp duty, on properties worth up to £500,000 in an attempt to stimulate the housing market.  
However, Galley said it was “highly unlikely that this level of price inflation will be sustained,” despite a boost from these positive factors in the short-term.
The U.K.’s macroeconomic picture should become clearer in the next few months, he added, as the government’s economic support measures wind up and the “true scale of the impact of the pandemic on the labour market becomes apparent.”
“Rising house prices contrast with the adverse impact of the pandemic on household earnings and with most economic commentators believing that unemployment will continue to rise, we do expect greater downward pressure on house prices in the medium-term,” Galley said. 

Defying ‘economic reality’ 

Jonathan Hopper, CEO of Garrington Property Finders, said that parts of the property market were shifting from “frenetic to the frothy.”
“Two months of surging prices, in what the Halifax itself has described as a ‘mini-boom’, has powered the property market to a golden summer,” he said in a statement.
Indeed, Hopper said the data looked positive on the surface, with a growing number of homes for sale and a rebound in mortgage approvals.
In data released last week, the Bank of England said the number of mortgages approved had risen from 39,900 in June to 66,300 in July, though this was still 10% lower than the 73,700 housing loans approved in February, pre-pandemic.
Rural and coastal homes were proving particularly popular, Hopper said, with many people reassessing what they want from their home as working remotely has become the “new normal” amid the pandemic.
However, he argued that the “resulting momentum on prices is pushing the market ever more out of kilter with the wider economy” and that it could not “defy economic reality for long.”
“That disconnect will be put to a stern test if the Autumn brings further fragility to the economy and again in March when the stamp duty holiday comes to an end,” Hopper added.

Comments

Popular posts from this blog

Analysis | The Cybersecurity 202: How the shutdown could make it harder for the government to retain cybersecurity talent

By Joseph Marks 13-17 minutes THE KEY President Trump delivers an address about border security amid a partial government shutdown on Jan. 8. (Carolyn Kaster/AP) The partial government shutdown that's now in its 18th day is putting key cyber policy priorities on hold and leaving vital operations to a bare bones staff. But the far greater long-term danger may be the blow to government cyber defenders' morale, former officials warn. With the prospect of better pay and greater job security in the private sector, more government cyber operators are likely to decamp to industry, those former officials tell me, and the smartest cybersecurity graduates will look to industry rather than government to hone their skills. That’s especially dangerous, they say, considering the government’s struggle to recruit and retain skilled workers amid a nationwide shortage of cybersecurity talent. About 20 percent of staffers are furloughed at the De

Democrats call for investigation into Trump’s iPhone use after a report that China is listening:Analysis | The Daily 202 I The Washington Post.

washingtonpost.com By James Hohmann _________________________________________________________________________________ President Trump and Chinese President Xi Jinping visit the Great Hall of the People in Beijing last November. (Andrew Harnik/AP) With Breanne Deppisch and Joanie Greve THE BIG IDEA: If Democrats win the House in two weeks, it’s a safe bet that one of the oversight hearings they schedule for early next year would focus on President Trump’s use of unsecured cellphones. The matter would not likely be pursued with anywhere near the gusto that congressional Republicans investigated Hillary Clinton’s use of a private email server during her time as secretary of state. Leaders of the minority party have higher priorities . But Democratic lawmakers made clear Thursday morning that they will not ignore a New York Times report that Trump has refused to stop using iPhones in the White House, despite repeated warnings from U.S. intelligence offici

RTTNews: Morning Market Briefing.-Weekly Jobless Claims Edge Down To 444,000. May 13th 2010

Morning Market Briefing Thu May 13 09:01 2010   Commentary May 13, 2010 Stocks Poised For Lackluster Open Amid Mixed Market Sentiment - U.S. Commentary Stocks are on pace for a mixed start to Thursday's session, as a mostly upbeat jobs report continued to relieve the markets while some consternation regarding the European debt crisis remained on traders' minds. The major index futures are little changed, with the Dow futures down by 4 points. Full Article Economic News May 13, 2010 Weekly Jobless Claims Edge Down To 444,000 First-time claims for unemployment benefits showed another modest decrease in the week ended May 8th, according to a report released by the Labor Department on Thursday, although the number of claims exceeded estimates due to an upward revision to the previous week's data. Full Article May 13, 2010 Malaysia's Decade High Growth Triggers Policy Tightening Malaysia's economy grew at the fastest pace in a decade in