The "mini-boom" in the UK housing market continues into August
UK house prices saw a surge higher in July and that sort of "mini-boom" continued into August, with Halifax noting that house prices jumped another 1.6% on the month.
The average price of of a property rose to £245,747 with house prices in August being 5.2% higher than in the same month a year ago.
But much like last month, it remains to be seen if such price inflation can be sustained as we look towards the latter stages of the year. If anything, it is likely to be temporary and with the furlough program set to end, it will put pressure on the jobs market and in turn on consumer spending - leading to negative pressures on house prices.
Halifax notes that:
"House prices continued to beat expectations in August, with prices again rising sharply, up by 1.6% on a monthly basis. Annual growth now stands at 5.2%, its strongest level since late 2016, with the average price of a property tipping over £245,000 for the first time on record.
"A surge in market activity has driven up house prices through the post-lockdown summer period, fuelled by the release of pent-up demand, a strong desire amongst some buyers to move to bigger properties, and of course the temporary cut to stamp duty.
"Notwithstanding the various positive factors supporting the market in the short-term, it remains highly unlikely that this level of price inflation will be sustained. The macroeconomic picture in the UK should become clearer over the next few months as various Government support measures come to an end, and the true scale of the impact of the pandemic on the labour market becomes apparent.
"Rising house prices contrast with the adverse impact of the pandemic on household earnings and with most economic commentators believing that unemployment will continue to rise, we do expect greater downward pressure on house prices in the medium-term."
