UK house prices jump as market strength persists

Survey shows strong momentum in market despite partial withdrawal of tax breaks

Photograph: iStock

Photograph: iStock

 

British house prices rose sharply last month in a further sign of strong momentum in the market even after the partial withdrawal of tax breaks on property purchases, a survey from mortgage lender Halifax showed on Tuesday.

House prices rose by 0.7 per cent in August, the biggest month-on-month rise for three months and following a 0.4 per cent rise in July, Halifax said.

In annual terms, house price growth cooled to 7.1 per cent from 7.6 per cent in July, the weakest reading for five months.

The number of property purchases slumped in July when a year-long exemption from stamp duty for the first £500,000 of a house purchase ended in England and Northern Ireland.

But other gauges of the housing market suggest the pounds gradual expiry of the tax breaks has not resulted in a sharp slowdown.

“We believe structural factors have driven record levels of buyer activity - such as the demand for more space amid greater home working,” Russell Galley, managing director of Halifax, said.

“These trends look set to persist and the price gains made since the start of the pandemic are unlikely to be reversed once the remaining tax break comes to an end later this month.”

Last week, rival mortgage lender Nationwide said its measure of British house prices rebounded surprisingly strongly in August to show their second-biggest monthly rise in 15 years after a fall in July. – Reuters