UK property prices jump to new all-time high

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UK residential property prices saw a far greater-than-expected 2% leap between July and August to reach a new all-time high, according to new figures from Nationwide.

House prices now average £224,123 ($299,82) in August, up from £220,935 in July.

It provides the latest sign of the mini-boom in Britain’s property market in recent months, with pent-up demand after lockdown and a temporary stamp duty holiday fuelling growth in sales and prices.

The data from the building society, one of Britain’s biggest mortgage lenders, showed a 3.7% increase year-on-year. Analysts had expected just a 0.5% rise on July, and a 2% annual increase.

It comes a day after official figures showed lending for new mortgages soared by 66.2% between June and July. Lenders approved 66,300 mortgages for residential property purchases in July, according to a comprehensive survey by the Bank of England (BoE) published on Tuesday.

READ MORE: UK mortgage approvals soar 66% as stamp duty slashed

Approvals were only 10% below February levels, and more than seven times higher than the 9,300 mortgages signed off in May in the wake of national lockdown and lenders prioritising efforts to help existing mortgage customers.

UK chancellor Rishi Sunak announced a temporary stamp duty holiday on purchases under £500,000 ($671,000) in England and Northern Ireland in early July. The threshold had previously been £125,000, albeit with higher thresholds for first-time buyers.

The finance minister said at the time the measures would “catalyse the housing market and boost confidence,” as the government battles to drag the country out of a deep recession.

Hugh Wade-Jones, managing director of brokers Enness Global Mortgages, said this week the tax cuts had “turbo-charged” the market.

Lettings have lagged behind the sales boom, but separate figures from property firm Knight Frank on Tuesday also showed viewings for lettings had hit a ten-year high in London and the Home Counties at the end of August.

READ MORE: Zoopla predicts UK house prices will hold firm throughout 2020

The company said students had driven the surge in demand, as uncertainty over starting university mid-pandemic and the recent controversial release of exam results delayed accommodation decisions.

The rebound in the residential property sector comes in spite of the dire state of the wider UK economy and a wave of high-prof job losses.

Government and central bank crisis measures including low interest rates, mortgage re-payment holidays, and the furlough scheme are also seen to have propped up the market.

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