UK house prices hit all-time high

UK property prices are at an all-time high. Picture: Getty Images/iStockphoto

UK property prices are at an all-time high. Picture: Getty Images/iStockphoto - Credit: Getty Images/iStockphoto

UK house prices reached an all-time high last month, with Nationwide recording the largest monthly increase in 16 years.

The average UK property price now stands at £224,123, up 2 per cent month-on-month and 3.7 per cent year-on-year.

Robert Gardner, Nationwide’s chief economist, said: “House prices have now reversed the losses recorded in May and June and are at a new all-time high.

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

Gardner credited pent up demand and behavioural shifts brought on by life in lockdown for the rebound.

He added: “These trends look set to continue in the near term, further boosted by the recently announced stamp duty holiday, which will serve to bring some activity forward.

“However, most forecasters expect labour market conditions to weaken significantly in the quarters ahead as a result of the after-effects of the pandemic and as government support schemes wind down.

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“If this comes to pass, it would likely dampen housing activity once again in the quarters ahead.”

Andrew Montlake, managing director of mortgage broker Coreco, agreed. He said: “Two words: reality check. As strong as the property market is right now, it will not last.

“Demand is understandably strong after lockdown and the added bonus of the stamp duty holiday, but unemployment is rising by the day and the economic outlook is highly uncertain as the furlough scheme ends.

“In the final months of the year we will start to see a reversal in the current rate of house price growth.”