Britain's post-lockdown property boom: UK house prices hit record high

UK house prices have hit a record high following a post-lockdown boom, with the average home now worth £245,747.

A newly-released report by Halifax said property prices  were 5.2% higher than the same month a year earlier and property values were up by 1.6% month on month.

But with household incomes under pressure and job loss announcements mounting, the report said it is 'highly unlikely' that current levels of house price growth will be sustained.

A downward pressure on house prices is expected to build in the medium term, it said.

Russell Galley, managing director, Halifax, said: '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.

But he added: '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.'

City living: Average house price shifts in cities across the UK, according to Zoopla. Aberdeen is the only city not to see a rise

City living: Average house price shifts in cities across the UK, according to Zoopla. Aberdeen is the only city not to see a rise

The 10 cities in the UK that have seen the highest rise in average house prices between the months of July and August. Pictured are some of the houses affected

The 10 cities in the UK that have seen the highest rise in average house prices between the months of July and August. Pictured are some of the houses affected

NOTTINGHAM: This four bed detached house if for sale for 675,000. A nearby detached house, with the same number of bedrooms, sold for £620,000 in May

NOTTINGHAM: This four bed detached house if for sale for 675,000. A nearby detached house, with the same number of bedrooms, sold for £620,000 in May

NOTTINGHAM: Pictured: Inside the house. The Nottingham property reflects the rise in prices in the city. Average house prices in Nottingham rose by 4.4 per cent from July to August, the largest jump in the UK

NOTTINGHAM: Pictured: Inside the house. The Nottingham property reflects the rise in prices in the city. Average house prices in Nottingham rose by 4.4 per cent from July to August, the largest jump in the UK

Commenting on the report, Miles Robinson, head of mortgages at online mortgage broker Trussle, said: 'We're fast approaching the end of the furlough scheme and with it a period where the employment market could be incredibly challenging for many. As such, the demand we're currently seeing might begin to fade.

'In addition, large numbers of buyers are already locked out of the market. First-time buyers in particular are facing increased scrutiny from lenders, tighter criteria and a shrinking range of high loan-to-value (LTV) products. The number of 90% LTV mortgage products available has dramatically decreased.

'Alongside this, rising house prices means first-time buyers will be getting less for their money, presenting a further hurdle to getting on to the property ladder.'

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: 'The perfect storm of pent-up demand, lockdown prompting a desire for bigger homes, and the cut to stamp duty has created a strong surge in market activity, which has carried on into this month.

'The demand for mortgages continues to be strong as borrowers take advantage of some competitively-priced deals, particularly those with big deposits to put down. For first-time buyers, the situation is trickier, with less choice of high loan-to-value products, and advice is more crucial than ever.' 

Activity in the housing market is now running at its strongest pace for over five years, with the number of newly agreed sales in August up 76 per cent against the five year average, according to firm Zoopla.

The time it takes to sell a home has shrunk from 39 days to 27 days since lockdown, compared to the same period a year ago.

MANCHESTER: This five bed property is on the market for £625,000. It previously sold for £390,000 in 2016

MANCHESTER: This five bed property is on the market for £625,000. It previously sold for £390,000 in 2016

MANCHESTER: Pictured: Interior of the property. Manchester saw the second biggest rise in house prices from July to August, at four per cent

MANCHESTER: Pictured: Interior of the property. Manchester saw the second biggest rise in house prices from July to August, at four per cent

There is strong demand for three-bedroom homes, which are now taking just 24

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