HOUSE PRICES KEEP ON SOARING

Buyers escaping lockdown trigger biggest monthly rise in 16 YEARS

A DESIRE for bigger homes and gardens after lockdown has pushed house prices to a record high. A report by Britain’s biggest building society has revealed the largest monthly rise in property prices for 16 years.

The study by Nationwide shows that buyers have shrugged off concerns about coronavirus, with the average UK house price leaping by 2 per cent in August to £224,123 – the biggest spike since February 2004.

This equates to an increase of almost £3,200, and means house

prices have already clawed back the losses incurred during lockdown.

The surge comes after a rise of 1.8 per cent – or £4,533 – in July, and means that house prices have risen by almost £8,000 in two months.

They fell by 1.6 per cent in both May and June, knocking just over £6,500 off the value of the average home.

Robert Gardner, chief economist at Nationwide, said lockdown had caused people to ‘reassess their housing needs’.

‘House prices have now recovered the losses recorded in May and June and are at an all-time high,’ he said.

‘The bounce back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions.’

Mr Gardner added this had partly been driven by ‘pent-up demand’ during lockdown, when the housing market was effectively put into hibernation.

And he said ‘behavioural shifts may also be boosting activity, as people reassess their housing needs and preferences’.

The building society did not provide a regional breakdown in its report. But a string of estate agents have reported a surge in demand for properties with more space and bigger gardens.

There have also been reports of more people living in towns and cities enquiring about rural properties – with Scotland seeing a particular boom in people escaping to the country.

Experts have partly attributed this to the explosion in the number of people working from home, meaning they have less need to live close to their office.

Homes north of the Border are also changing hands quicker than anywhere else in the UK, with the average property selling in only two weeks, according to a report by house sales website Zoopla.

The average time it took for sales to go through in Scotland following the reopening of the market in May dropped from 21 days last year to 15 this year.

The UK average for home sales is 27 days, a 31 per cent reduction on the 39 days it took over the same 90-day period between May and August last year.

Average house prices have also boomed by 2.5 per cent compared with last year.

House prices in Edinburgh grew at the highest rate in Scotland, rising by 3 per cent to an average of £229,100. This outstrips the UK average of 2.5 per cent.

The statistics show Glasgow is not far behind, with growth of 2.3 per cent.

Experts predict that house prices will continue to increase to the end of the year, by up to 3 per cent.

But Nationwide warned that the wheels could fall off the property market’s recovery if unemployment soars when the UK Government’s Job Retention ends next month.

England has seen a stamp duty ‘holiday’ for buyers, with no levy charged on homes up to £500,000.

Finance Secretary Kate Forbes said in July that the threshold for Scotland’s equivalent, Land and Buildings Transaction Tax, would rise from £145,000 to £250,000.