House prices rising at fastest rate for 16 years: stamp duty holiday sees ‘barnstorming’ rush of buyers

House prices surged at their fastest rate in 16 years last month to an all-time high as the stamp duty holiday unleashed a “barnstorming” rush of buyers.

Figures from lender Nationwide show that the average cost of a home in Britain rose two per cent in August to £224,123.

It followed a 1.8 per cent rise in July, the month when Chancellor Rishi Sunak announced that the tax would be suspended on the first £500,000 of any purchase until March next year.

Prices last rose by two per cent or more in a single month in February 2004, according to Nationwide data.

The annual rate of increase accelerated from 1.5 per cent to 3.7 per cent.

The dramatic increase in activity has been particularly strong in London where more buyers benefit from the maximum £15,000 saving from the stamp duty holiday.

Guy Gittins, managing director of London-based agency Chestertons, said enquiries in August were up 55 per cent on last year, while sales were 40 per cent higher.

Another major London agency, Hamptons International, said it had seen its busiest August for five years.

Nationwide’s chief economist Robert Gardner said: “House prices have now reversed the losses recorded in May and June and are at a new all-time high. The bounce back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions.”

Lucy Pendleton, co-founder of London estate agents James Pendleton, said: “Buyers emboldened by the stamp duty holiday have been engaged in a pitch battle for property, delivering a barnstorming recovery for the market.

“A stunning proportion of properties are now going for asking price or more, and offers are flooding in. It’s like lockdown was a bad dream.”

But Andrew Montlake, managing director at mortgage broker Coreco, warned: “In the final months of the year we will start to see a reversal in the current rate of house price growth, as the true impact of Covid-19 on the economy shows through.”

Original article by Jonathan Prynn and Joanna Bourke – Homes & Property