Annual house price growth rose from 10.5% in July to 11% in August, according to the latest Nationwide house price index. Prices rose 2.1% month-on-month, the second largest gain in 15 years, with the average house price now close to £250,000. Nationwide's chief economist, said: "House prices are now around 13% higher than when the pandemic began. The bounce back 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. Moreover, the monthly price increase was substantial – at 2.1%, it was the second largest monthly gain in 15 years (after the 2.3% monthly rise recorded in April this year).
The strength may reflect strong demand from those buying a property priced between £125,000 and £250,000 who are looking to take advantage of the stamp duty relief in place until the end of September, though the maximum savings are substantially lower (£2,500 compared to a maximum saving of £15,000 on a property valued at £500,000 before the stamp duty relief in England tapered). Lack of supply is also likely to be a key factor behind August’s price increase, with estate agents reporting low numbers of properties on their books.