Prices rose by two per cent in August according to Nationwide, taking the average up to £224,123.
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The rise has been caused by the stamp duty holiday announced in early July, combined with a surge of properties being put on the market post-lockdown.
But what does the future hold for the housing market? Will prices continue to rise, or can we expect a Covid-inspired crash with the economy now in recession?
Here is what the experts have to say…
‘Downward pressure’ on the way
Russell Galley, managing director of mortgage lender Halifax, told Homes & Property: “Notwithstanding the various positive factors supporting the market in the short term, it remains highly unlikely that this level of price inflation will be sustained.
“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.”
Covid effect coming in 2021
Housing analyst Neal Hudson agrees. The housing market has been protected from the immediate effects of the pandemic by measures like the stamp duty and mortgage payment holidays, as well as the furlough scheme – but something has to give eventually.
He told i: “As these end, the downwards pressure on the housing market will increase.
“There is also the uncertainty of what Brexit will bring. In the absence of a sustained and widespread economic recovery that would probably require a vaccine, 2021 could end up being the year the pandemic hits the housing market.”
How much will prices fall?
It is widely expected that property prices will fall, but experts disagree by how much.
The Centre for Economics and Business Research warns of a drop in prices of up to 13 per cent, due to people worried about their post-Covid futures holding off making such big expenditures.
Meanwhile, estate agent Savills is expecting a far smaller decrease, of just five per cent.