LONDON (Reuters) – British house prices rose last month at the fastest annual pace since June 2016 in the latest sign of a post-coronavirus lockdown surge in the housing market, data from mortgage lender Halifax showed on Wednesday.
House prices were 7.3% higher than in September last year, accelerating from annual growth of 5.2% in August.
“Context is important with the annual comparison, however, as September 2019 saw political uncertainty weigh on the market,” said Russell Galley, managing director at Halifax.
September last year saw an escalation of Brexit tensions, marked by a series of knife-edge votes in parliament and an attempt by Prime Minister Boris Johnson to suspend parliament.
House prices rose 1.6% between August and September, Halifax said.
Other indicators of the housing market have also pointed to a surge in activity in recent months, spurred by the release of pent-up demand following the coronavirus lockdown and a cut to property sales taxes.
“Behavioural shifts may also be boosting activity, as people reassess their housing needs and preferences as a result of life in lockdown,” said Howard Archer, chief economist adviser to the EY ITEM Club consultancy.
Separate official data on Wednesday showed average house prices struck a new record high of 238,000 pounds in July, up 2.3% in annual terms.
Most analysts are sceptical about a lasting upswing.
“We continue to believe that significant downward pressure on house prices should be expected at some point in the months ahead as the realities of an economic recession are felt ever more keenly,” Galley said.
Reporting by Andy Bruce; editing by William Schomberg and Paul Sandle