The property market has enjoyed a record-smashing summer.
House prices jumped to a new high in August after the biggest monthly rise in 16 years, according to new Nationwide figures.
And demand is off the scale, with buyers flooding back since the market re-opened in mid-May after being frozen during lockdown. But is now really a good time to buy a new home?
And will this so-called ‘mini boom’ last? What’s the truth about the impact of Covid on property prices? Did they collapse — and have they suddenly rebounded?
Here we explain everything you need to know about what’s happening in the housing market.
Is the property market really booming?
Ordinarily, there is a bit of a lull over the summer months as people go away on holiday — but not this year. House prices have just hit an all-time high, with the average home costing £224,123.
This is 3.7per cent higher than prices last August. Last month, prices leapt 2per cent — the biggest monthly jump since 2004.
August was the housing market’s busiest month for more than a decade, with the highest number of homes put up for sale since 2008, according to Britain’s largest property website, Rightmove.
Country houses are feeling the benefits of a national rise in house prices - its price has risen by five per cent
House prices jumped to a new high in August after the biggest monthly rise in 16 years, according to new Nationwide figures
Despite social distancing still being in place, estate agents up and down the country say they have been overwhelmed with enquiries.
Many insist they have never known anything like it.
But why the sudden spike in interest?
Part of the reason it’s so busy is that the market is still playing catch-up after lockdown, with buyers and sellers looking to push through sales they were forced to put on hold in the Spring.
But much of the demand is coming from new buyers who may have brought forward plans to buy in a bid to cash in on the stamp duty cut announced by chancellor Rishi Sunak in July.
By raising the threshold from £125,000 to £500,000 until March 31 next year, he slashed the stamp duty bill to zero for 90 per cent of buyers.
Those purchasing homes worth more than £500,000 will still have to pay some tax, but stand to save as much as £15,000.
Mortgages are also very cheap right now after the Bank of England cut the base rate to 0.1per cent in March.
The average two-year fixed mortgage rate, for example, is just 2.2per cent, while the cheapest is only 1.14 per cent if borrowers have a sizeable deposit.
Activity has also been boosted by a behavioural shift as people reassess their housing needs.
Since lockdown, many have realised they value outdoor space and want to move to bigger properties with gardens.
Others who are working from home and no longer need to be within commuting distance of the office are looking to move out of cities to areas where they can get more for their money.
About 15 per cent of people are considering moving as a result of lockdown life, according to a survey by Nationwide in May.
Some wealthier owners may also be bringing forward their decision to sell in anticipation of a potential capital gains tax rise.
Are prices soaring everywhere?
Average UK house prices are rising because the recent surge in activity has seen demand outweigh supply.
According to Nationwide’s new figures, the 2per cent rise in August has cancelled out falls seen in May and June.
As always, the national picture does not always reflect what is going on everywhere. Prices are believed to be rising fastest in locations near the coast and in the country, mirroring the increased demand from buyers seeking out more green space and fresh air.
A two bedroom apartment in Edgbaston, Birmingham is selling for £210,000 - its original guide price was £235,000
According to estate agent Hamptons, the average home sold in the countryside in the last four months went for 97.9 per cent of its asking price — the highest share in three years.
And 16 per cent of homes in the countryside went for more than the asking price, rising to 21per cent for homes located in smaller towns and suburbs.
While four and five-bedroom homes with a garden are selling quickly, demand for one-bedroom flats has tumbled, according to research by Zoopla.
The property website also noted more activity among wealthier demographics post-lockdown, who are less likely to be affected by the recession.
The Zoopla House Price Index reveals that in the year to July, prices rose by an average of 2.5per cent.
The biggest surge was in Nottingham, at 4.4 per cent. Figures from the Office for National Statistics yesterday show that, in the year to May, the lowest annual growth was in the East of England, where prices increased by 0.7per cent over the year.
With an average price of £135,000, the North East is the only English region yet to fully recover from the 2008 house price crash.
London prices remain almost twice the national average at £479,000. However, the capital could be facing a rougher ride than other regions as a growing group of new homeworkers look to abandon the Big Smoke.
A survey by the Royal Institution of Chartered Surveyors revealed that prices had risen in all regions in July with the sole exception of London.
Foreign investors have also been questioning if London is still attractive since Brexit, hitting the capital’s high-end property market.
But a report by Savills claims that the capital’s traditional