The Nationwide Building Society has reported that house prices increased by 0.9% month-on-month in September, following a 2.0% rise in August.
This meant 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.
Robert Gardner, the Nationwide’s chief economist, said: “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.
“Our recent market research1 indicates that, of the people that had been considering a move before the pandemic, 19% have put their plans on hold, with over a quarter (27%) of these citing concerns about the property market.
“Younger people were much more likely to have put off plans than older people, which may reflect concerns about employment prospects.
“Indeed, most forecasters expect labour market conditions to weaken significantly in the quarters ahead as tighter restrictions dampen economic activity and the furlough scheme winds down. While the recently announced jobs support scheme will provide some assistance, it is not as comprehensive as the furlough scheme it replaces.
“Interestingly, around 10% of those surveyed in September said they were in the process of moving as a result of the pandemic, with a further 18% considering a move for the same reason. This pattern was evident across the country, especially in London.”
Guy Harrington, CEO of residential lender Glenhawk, added: “The [housing market] juggernaut shows little sign of slowing, powered by an unprecedented combination of unsustainable government stimulus, the looming prospect of negative interest rates and pent up consumer activity. Make no mistake though, there will be bumps in the road; the only question being how big will they be?
“Despite the Chancellor’s best efforts, the UK is staring down the barrel of a once-in a generation employment crisis, whilst the appeal of out-of-town living will quickly lose its lustre during the cold Winter months. It’s time to buckle up.”