United Kingdom: House prices rise further in August
September 2, 2020
According to the Nationwide Building Society (NBS), house prices in the United Kingdom rose 2.0% month-on-month in August, up from July’s 1.8% rise. August’s increase was the largest since 2004, and was driven by an easing of Covid-19 lockdown measures and pent-up demand boosting housing activity. On an annual basis, house prices were up 3.7% (July: +1.5% year-on-year). The average house price in August was GBP 224,123.
In the next few months, pent-up demand and the stamp duty holiday could continue to support prices. That said, Robert Gardner, chief economist at Nationwide, cautioned that the more positive picture may not last:
“Most forecasters expect labour market conditions to weaken significantly in the quarters ahead as a result of the aftereffects 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.”
Author: Oliver Reynolds, Economist