United Kingdom: Annual house price growth accelerates further into double figures in June
According to the Nationwide Building Society, house prices in the United Kingdom rose 0.7% month-on-month in June, following May’s 1.7% growth. On an annual basis, house prices were up 13.4%, above May’s 10.9% and marking the fastest growth since 2004. June’s acceleration likely reflected the stamp duty holiday, improved consumer sentiment as the country moved out of lockdown, and changing housing preferences in the wake of the pandemic—particularly a desire for more space. Moreover, a favorable base effect flattered the reading.
On the outlook, Robert Gardner, chief economist at Nationwide, commented:
“Underlying demand is likely to remain solid in the near term as the economy unlocks. […] But as we look toward the end of the year, the outlook is harder to foresee. Activity will almost inevitably soften for a period after the stamp duty holiday expires at the end of September, given the strong incentive for people to bring forward their purchases to avoid the additional tax. Nevertheless, underlying demand is likely to soften around the turn of the year if unemployment rises as most analysts expect, as government support schemes wind down.”