UK house prices that dipped in May and June have risen to an “all-time high” following the country’s easing out of lockdown, according to Nationwide, the world’s largest building society.
The “unexpectedly rapid recovery” is the highest monthly rise in house prices since February 2004 when the rise was 2.7 percent, Gardner said.
People re-thinking their housing plans while in lockdown have also affected the upsurge in house prices. Nationwide research carried out in May showed that about 15 percent of those surveyed were thinking about moving due to the lockdown.
“Pent up demand is coming through, where decisions taken to move before lockdown are progressing," Gardner said.
Tax BreakGardner also said the upward trend would continue in the near term in response to the stamp duty holiday, a tax break for home buyers recently announced by the government, which will encourage some people to buy now when they may have otherwise delayed purchasing property.
“We would expect it to increase the number of property transactions in 2020–21 by around 100,000, with around a quarter of those being truly additional while three-quarters would be brought forward from 2021–22,” the OBR said.
Rightmove, the UK largest property marketplace, last week echoed the impact of the stamp duty holiday, which has boosted the market in southern England.
Less UrbanAn additional reason thousands of urban sellers are putting their properties up for sale is that many are looking to move to more rural areas and into homes with more outside space, Shipside said.
Being close to a train station has also become less important, as working from home has become a “more permanent way of life,” he said.
Estate agents have also noted the drivers of the upward trend in UK house buying activity.
“The main thing we’ve seen is that people who were on the fence about moving before the stamp duty holiday have sat up and decided that this is their right time to move,” he said.
The upsurge in Britain's house prices is unlikely to be sustainable, however.
“Most forecasters expect labor market conditions to weaken significantly in the quarters ahead as a result of the after-effects of the pandemic and as government support schemes wind down. If this comes to pass, it would likely dampen housing activity once again in the quarters ahead,” Nationwide's Gardner said.