British house prices jumped by the most since 2016 in August to hit a record high, mortgage lender Halifax said, adding to signs of a post-lockdown boom in the country’s housing market even as fears grow of a sharp rise in unemployment.
House prices were 5.2% higher than in August 2019, Halifax said.
The surge in activity was fuelled by a temporary tax cut on purchases, pent-up demand and some buyers wanting to move to bigger properties after the lockdown, Russell Galley, managing director at Halifax, said.
“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,” he said.
Britain’s government is winding down its huge job retention scheme and economists expect unemployment to jump in the coming months.
“We do expect greater downward pressure on house prices in the medium-term,” Galley said.
Last week, another mortgage lender Nationwide also reported house prices hit a record high in August and data from the Bank of England showed mortgage approvals rose unexpectedly strongly in July.
House prices were 1.6% higher than in July, Halifax said, slightly higher than the median forecast of 1.5% in a Reuters poll of economists.