Annual house price growth recorded in the Nationwide House Price Index is at 5% for September, which is the highest rate since September 2016.
Robert Gardner, Nationwide’s Chief Economist, comments within the Index report: “UK house prices increased by 0.9% month-on-month in September, after taking account of seasonal effects, following a 2.0% rise in August. As a result, there was a further pick up in annual house price growth from 3.7% in August to 5.0% in September – the highest level since September 2016.
“Housing market activity has recovered strongly in recent months. Mortgage approvals for house purchase rose from c66,000 in July to almost 85,000 in August – the highest since 2007, well above the monthly average of 66,000 prevailing in 2019.
“The rebound reflects a number of factors. Pent-up demand is coming through, with decisions taken to move before lockdown now progressing. The stamp duty holiday is adding to momentum by bringing purchases forward. Behavioural shifts may also be boosting activity as people reassess their housing needs and preferences as a result of life in lockdown
Lucy Pendleton, Co-Founder of independent estate agents James Pendleton, comments: “This is the peak but there will be no collapse.
“Three planets aligned to produce this stellar growth. Pent-up demand from lockdown has been followed by a wave of activity from those who realised they wanted a bigger property, and all this was dealt an extra dose of encouragement by the stamp duty holiday.
“It can’t continue forever though, and it’s very likely indeed that we won’t see a higher annual growth rate this year. That said, prices and a good rebound in transaction levels should hold up more than usual into the autumn because of the delays buyers are still experiencing over mortgage approvals, surveys and conveyancing. We’re still telling buyers that if they can get a mortgage offer confirmed within three weeks of survey then they’re doing well.
“The market is strong but some vendors have mistakenly started to believe any property in any condition will sell. Those vendors have got the wrong end of the stick. Quality homes are selling but buyers are not being reckless and won’t pay top dollar for properties that need a lot of money spent on them.
“London appears to be bucking the national trend with healthy price growth across the spectrum, right through from homes being snapped up by first-time buyers to properties selling for over £1 million. The reason that’s happening in the capital is because its first-time buyers are typically older, and they are normally more secure in their jobs and further along in their careers.”