House prices were 1.6% higher in August than in July and 1.3% higher in the latest quarter (June to August) compared to the preceding three months (March to May).

According to the Halifax House Price Index, house prices in August were 5.2% higher than in the same month a year earlier, and the 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,” Halifax managing director Russell Galley stated.

“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.”

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