U.K. House Prices Jump Most Since 2016 in Post-Lockdown Boom

(Bloomberg) — U.K. house prices rose at their strongest annual pace since 2016 last month as Britons’ changing work patterns and a tax reduction on purchases fanned a resurgence.

a small town: UK House Prices See Monthly Fall in May Since 2009

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UK House Prices See Monthly Fall in May Since 2009

Average house prices rose 7.3% in September from a year earlier to a record average of 249,870 pounds ($323,000), mortgage lender Halifax said Wednesday. On the month alone, prices gained 1.6%.


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Since the lockdown started to be eased in May, a wave of buyers have sought to sell up in urban areas such as London to move to places with bigger yards and more green space.

They’ve been helped by a temporary tax break on home purchases that will expire next year. Prime Minister Boris Johnson signaled more support for the market this week, with a promise of more generous home loans for millions of young first-time buyers.

Real estate agents and economists are unsure how long the upswing can last. Rising unemployment, risk aversion among lenders and a potential resurgence of the virus mean the market may lose momentum in the next few months.

“The release of pent up demand and indeed the stamp duty holiday can only be temporary fillips,” said Russell Galley, managing director at Halifax. “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.”

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Stocks jump as Trump prepares to return to White House

Stock markets on Monday closed up, adding to earlier gains after President TrumpDonald John TrumpQuestions remain unanswered as White House casts upbeat outlook on Trump’s COVID-19 fight White House staffers get email saying to stay home if they experience coronavirus symptoms White House says ‘appropriate precautions’ were taken for Trump’s outing to see supporters MORE announced that he would be discharged from Walter Reed hospital later in the day.

The Dow Jones Industrial Average jumped 466 points, or 1.7 percent, and the S&P 500 increased 60 points, or 1.8 percent. The tech-heavy NASDAQ performed even better, with a 257-point increase, or 2.3 percent.

Trump, who announced Friday that he has COVID-19, said he’d return to the White House, where he will continue to receive medical attention from a full team of medical professionals.

Trump’s apparent eagerness to downplay the severity of the virus raised questions as to what led to the decision. His tweet announcing his discharge urged people not to be “afraid” of the virus that has killed more than 210,000 Americans, and comes a day after he drew criticism for taking a drive to wave to supporters outside the hospital instead of staying isolated.

White House physician Sean Conley told reporters that Trump may still not be “out of the woods,” and refused to confirm whether the president had pneumonia as a result of the infection.

At the same time, hopes increased for the chances of agreement on another round of COVID-19 economic relief, though Republicans and Democrats remain hundreds of billions of dollars apart in negotiations.

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UK house prices jump as buyers seek gardens after lockdown: RICS

LONDON (Reuters) – The post-lockdown surge in Britain’s housing market intensified in August, and prices hit a four-year high, as buyers sought properties with gardens, according to a survey that also sent a warning signal that the recovery could run out of steam.

FILE PHOTO: The Knightsbridge house which has been purchased by Polish billionaire Dominika Kulczyk for 57.5 million British pounds, stands in London, Britain February 20, 2020. REUTERS/Simon Dawson

The monthly gauge of house prices from the Royal Institution of Chartered Surveyors (RICS) shot up to +44 in August from +13 in July, hitting its level since February 2016. A Reuters poll of economists had pointed to a reading of +25.

Prices rose across the country except for London where they have remained more or less flat over the past two months.

The survey chimed with other signs that a mini-boom is underway in the housing market – one of the few parts of the economy to have bounced back from the pandemic – helped in part by an emergency tax cut for buyers.

Demand accelerated sharply, helped by a shift towards properties with gardens after the COVID-19 lockdown, RICS said.

Some 83% said they expected to see higher demand for properties with gardens and most predicted reduced demand for homes in highly urban areas or tower blocks.

“The latest RICS survey provides firm evidence of a strong uplift in activity in the housing market which should help support the wider economy gain traction over the coming months,” RICS chief economist Simon Rubinsohn said.

Still, there were some ominous signs.

The survey’s gauge of sales for the next 12 months deteriorated further in August, dented by worries about the economy.

Last week Bank of England Governor Andrew Bailey said it was too soon to say if the rebound in the housing market was anything more than a release of pent-up demand following lockdown, helped by the temporary cut to property taxes.

Reporting by Andy Bruce; Editing by William Schomberg

Our Standards:The Thomson Reuters Trust Principles.

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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.”


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