U.K. House Prices Post Biggest Annual Increase Since 2016

(Bloomberg) — U.K. house prices posted their biggest annual gain since 2016 in September as a tax cut fueled a post-lockdown demand to move.

Values climbed 5% from a year earlier to an average of 226,129 pounds ($290,000), Nationwide Building Society said Wednesday. The report comes a day after Bank of England data showed mortgage approvals have hit a 13-year high.



chart: U.K. house prices up most since 2016


© Bloomberg
U.K. house prices up most since 2016

The strong housing market contrasts with other parts of the economy, which are still struggling to recover from the coronavirus disruption as the U.K. government reimposes some restrictions on movement and leisure.

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On Wednesday, the Recruitment and Employment Confederation found private-sector confidence subdued and many firms reducing pay. Lloyds Bank said its measure of business sentiment improved in September but remained well below the long-term average.

There was also a warning for Chancellor of the Exchequer Rishi Sunak about a surge in insolvencies unless the government extends measures designed to shield firms struggling amid the virus crisis.

The Institute of Directors made its plea on the day that the suspension of wrongful trading rules is due to come to an end. That emergency decision protected firms that may be facing a short-term hit from the virus from being forced to file for bankruptcy.

The relative outperformance of the housing market is in large part due to a government decision to suspend a tax on home purchases until the end of March as part of it stimulus package for the economy. Many analysts say the property boom will probably peter out after a few months as unemployment rises and aid packages come to an end.

For now, real estate is benefiting from pent-up demand following the lockdown, as well as a desire for bigger properties as people work from home more regularly.

“Housing market activity has recovered strongly,” said Robert Gardner, Nationwide’s chief economist. “The stamp duty holiday is adding to momentum by bringing purchases forward. Behavioral shifts may also be boosting activity as people reassess their housing needs.”

(Updates with insolvencies, business confidence)

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10 quality kitchen items to get from Wayfair’s biggest sale of the year, from Le Creuset cookware to All-Clad pans

Our team is dedicated to finding and telling you more about the products and deals we love. If you love them too and decide to purchase through the links below, we may receive a commission. Pricing and availability are subject to change.

Wayfair’s biggest sale of the year, Way Day, is happening on Wednesday, Sept. 23 and Thursday, Sept. 24. That’s two whole days to score deals on kitchen gadgets, rugs, outdoor furniture, lighting and more for sprucing up your home. Plus, everything ships free.

If you spend most of your time in the kitchen, it may be time to update your cookware or add a few more gadgets to your arsenal. For that, Way Day is offering up to 65 percent off kitchen items, including small appliances. Whether you love to cook, entertain or simply reheat leftovers from your favorite restaurant, a few good tools can make enjoying your meals easier.

One of our go-to brands for quality cookware is Le Creuset, and Way Day is offering a special bundle deal on its enameled cast iron: buy three Le Creuset items, get 20 percent off. You can make a set of items for yourself, or get a Dutch oven for you and two family members ahead of the holiday season.

Additionally, some Le Creuset items are already marked down even more. You can get the classic Le Creuset Cast Iron Round 3.5-Quart Dutch Oven and the Le Creuset Stoneware 4-Quart Rectangular Heritage Casserole with Lid for 32 percent off each.

Check out more of our top picks in the kitchen category from the Way Day sale below. But remember, you only have until Sept. 25 at 3 a.m. EST/ midnight PT to snag these deals.

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UK house prices see biggest jump since 2016 to hit fresh high

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U.K. house prices saw their biggest growth since 2016 in August, climbing to a record high, according to Britain’s longest-running barometer of the property market. 

The Halifax House Price Index, which is run by analysis company IHS Markit, found that U.K. house prices grew by 5.2% in August compared to the same month last year. It marks the strongest annual growth in prices since the end of 2016. 

The price of the average U.K. house hit £245,747 ($324,241) – the first time on record that prices have surpassed £245,000. It represents month-on-month growth of 1.6% from July to August, a touch higher than the 1.5% growth forecasted by economists in a Reuters poll. 

Russell Galley, managing director at Halifax, said the surge in property market activity had driven up house prices as coronavirus lockdown measures eased in the summer months. 

This had been “fueled by the release of pent-up demand, a strong desire amongst some buyers to move to bigger properties, and of course the temporary cut to stamp duty,” he said in a statement. 

In July, U.K. Finance Minister Rishi Sunak announced a holiday from property tax, known as stamp duty, on properties worth up to £500,000 in an attempt to stimulate the housing market.   

However, Galley said it was “highly unlikely that this level of price inflation will be sustained,” despite a boost from these positive factors in the short-term. 

The U.K.’s macroeconomic picture should become clearer in the next few months, he added, as the government’s economic support measures wind up and the “true scale of the impact of the pandemic on the labour market becomes apparent.” 

“Rising house prices contrast with the adverse impact of the pandemic on household earnings and with most economic commentators believing that unemployment will continue to rise, we do expect greater downward pressure on house prices in the medium-term,” Galley said. 

Defying ‘economic reality’ 

Jonathan Hopper, CEO of Garrington Property Finders, said that parts of the property market were shifting from “frenetic to the frothy.”

“Two months of surging prices, in what the Halifax itself has described as a ‘mini-boom’, has powered the property market to a golden summer,” he said in a statement.

Indeed, Hopper said the data looked positive on the surface, with a growing number of homes for sale and a rebound in mortgage approvals.

In data released last week, the Bank of England said the number of mortgages approved had risen from 39,900 in June to 66,300 in July, though this was still 10% lower than the 73,700 housing loans approved in February, pre-pandemic.

Rural and coastal homes were proving particularly popular, Hopper said, with many people reassessing what they want from their home as working remotely has become the “new normal” amid the pandemic.

However, he argued that the “resulting momentum on prices is pushing the market ever more out of kilter with the wider economy” and that it could not “defy economic reality for long.”

“That

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