United Kingdom: Housing market momentum strengthens in August
September 1, 2021
According to the Nationwide Building Society, house prices in the United Kingdom rose 2.1% month-on-month in August, following July’s 0.6% drop. On an annual basis, house prices were up 11.0%, up from July’s 10.5% increase. August’s reading is likely a reflection of tight home supply and changes in housing preferences due to the pandemic, which more than offset the tapering of the stamp duty holiday on home purchases.
On the outlook, Robert Gardner, chief economist at Nationwide, commented:
“Underlying demand is likely to remain solid in the near term. Consumer confidence has rebounded in recent months while borrowing costs remain low. This, combined with the lack of supply on the market, suggests continued support for house prices. But, as we look towards 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 incentive for people to bring forward their purchases to avoid the additional tax.”
Author: Oliver Reynolds, Economist