Annual house price growth jumped to 11.0% in August from 10.5% in July, the latest Nationwide House Price Index has revealed.

Average prices in August registered a 2.1% monthly rise, following the 0.6% fall in house prices that Nationwide reported in July.

The latest figures take the average UK house price to £248,857, a figure around 13% higher than when the COVID-19 pandemic began.

Nationwide chief economist, Robert Gardner, described the August bounce back as “surprising”.

“It seemed more likely that the tapering of stamp duty relief in England at the end of June would take some of the heat out of the market,” he commented. “Moreover, the monthly price increase was substantial – at 2.1%, it was the second largest monthly gain in 15 years – after the 2.3% monthly rise recorded in April this year.”

“The strength may reflect strong demand from those buying a property priced between £125,000 and £250,000 who are looking to take advantage of the stamp duty relief in place until the end of September.

“Lack of supply is also likely to be a key factor behind August’s price increase, with estate agents reporting low numbers of properties on their books.”

Trussle head of mortgages, Miles Robinson, agreed that the latest results come as a surprise, stating that many had expected to see a contraction in the market as the stamp duty holiday draws to an end.

Robinson said: “However, while unprecedented demand has meant sellers have very much been in the driving seat this past year, there are now some great opportunities for would-be house hunters.

“In particular, next time buyers who have equity or larger housing deposits can take advantage of some incredibly competitive interest rates. In recent months, a number of high profile lenders have introduced fixed term mortgage products with an interest rate below 1%. As such, there are still some significant incentives for buyers that are clearly fuelling demand.”

StripeHomes managing director, James Forrester, added: “The largest monthly gain in 15 years tells you all you need to know about the current health of the UK property market and it’s now abundantly clear that the tapered end of the stamp duty holiday isn’t going to be the significant event that many predicted in terms of its impact on property values.
 
“While it certainly spurred a revival in homebuyer demand, this increased intent to purchase has been driven by a desire to own our own homes, not to save a few thousand pounds, and this desire will continue to burn long after the final deadline has expired at the end of September.”

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