(Alliance News) - UK house prices increased to the highest levels since the Halifax house price index began thanks to a mini-boom in the housing market, Halifax said on Friday.
On an annual basis, UK house prices were 3.8% higher than in the same month a year earlier, while on a monthly basis, prices were 1.6% higher in July than in June - its highest ever monthly increase.
The average price of a house in the UK was GBP241,604 versus GBP237,616 in June.
"The latest data adds to the emerging view that the market is experiencing a surprising spike post lockdown. As pent-up demand from the period of lockdown is released into a largely open housing market, a low supply of available homes is helping to exert upwards pressure on house prices. Supported by the government's initiative of a significant cut in stamp duty, and evidence from households and agents suggesting that confidence is currently growing, the immediate future for the housing market looks brighter than many might have expected three months ago," Halifax Managing Director Russell Galley said.
However, Halifax highlighted uncertainty remains with likely greater downward pressure on prices in the medium term.
"Looking further ahead, there is still a great deal of uncertainty around the lasting impact of the pandemic. As government support measures come to an end, the resulting impact on the macroeconomic environment, and in turn, the housing market will start to become more apparent. In particular, a weakening in labour market conditions would lead us to expect greater downward pressure on prices in the medium-term," Galley added.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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