House prices continued their post-lockdown recovery in August, notching up their highest monthly rise in more than 16 years, says the Nationwide.
“House prices have now reversed the losses recorded in May and June and are at a new all-time high,” said its chief economist, Robert Gardner.
Prices rose by 2% last month, it said, taking the average price to £224,123.
The Nationwide said the recovery in housing market activity had been “unexpectedly rapid”.
It said the increase in August was the highest since February 2004, when house prices rose by 2.7%.
As a result, annual house price growth accelerated to 3.7%, from 1.5% in July.
“This rebound reflects a number of factors. Pent-up demand is coming through, where decisions taken to move before lockdown are progressing,” said Mr Gardner.
He added that “behavioural shifts” could be boosting activity, with people reassessing their housing needs after life in lockdown.
“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.
“If this comes to pass, it would likely dampen housing activity once again in the quarters ahead.”
Lucy Pendleton, director of estate agents James Pendleton, said: “Buyers emboldened by the stamp duty holiday have been engaged in a pitched battle for property, delivering a barnstorming recovery for the market.
“A stunning proportion of properties are now going for asking price or more, and offers are flooding in. It’s like lockdown was a bad dream.”
