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UK house prices see unexpected rise during August

The average price of a UK property is £248,857

UK house prices rose by around £5,000 last month as the property market continued its ascension as the government’s stamp duty holiday is wound down across England and Northern Ireland.

According to the Nationwide building society, the cost of the average property had risen by £4,628 to £248,857.

This represents a monthly rise of 2.1%.

Year-on-year property inflation increased by 11% in August, up by 0.5% compared to the month before. The move is despite expectations that house price increases would settle as the threshold for paying stamp duty was halved to £250,000 in July.

With interest rates at record lows, increased demand for space during lockdowns and support offered by the government, have caused the average price of a UK home to be 13% higher than 18 months ago.

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Robert Gardner, Nationwide’s chief economist, said: “The bounceback in August is surprising because it seemed more likely that the tapering of stamp duty relief in England at the end of June would take some of the heat out of the market.”

Sam Mitchell, CEO of online estate agent Strike, added: “House prices in the summer usually see a dip as people’s attention turns to summer activities, but August has defied all odds with annual house price growth rising to 11%.

“Now the stamp duty holiday is starting to taper, many are wondering whether this demand can sustain. But let’s not forget that although the stamp duty holiday has ended, there is still a huge supply and demand imbalance issue in the UK, and the incentives that are still available – like the stamp duty savings still to be had for houses under £250,000 – are driving this imbalance further.

“The other incentives on offer will no doubt contribute to this too, with increased availability of 95% mortgages and low interest rates just some of the things that buyers can take advantage of. And who knows, the government might also have something planned to keep the market moving, but only time will tell!”

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