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House prices to fall as 'true scale' of coronavirus becomes clear despite record high

The Halifax House Price Index found on a monthly basis, house prices in August were 1.6 percent higher than in July. House prices this month are 5.2 percent higher than in the same month a year earlier.

Russell Galley, Managing Director, Halifax, said: “House prices continued to beat expectations in August, with prices again rising sharply, up by 1.6 percent on a monthly basis.

“Annual growth now stands at 5.2 percent, its strongest level since late 2016, with the average price of a property tipping over £245,000 for the first time on record.

“A surge in market activity has driven up house prices through the post-lockdown summer period, fuelled by the release of pent-up demand, a strong desire among some buyers to move to bigger properties, and of course the temporary cut to stamp duty.

“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.

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“The macroeconomic picture in the UK should become clearer over the next few months as various government support measures come to an end, 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.”

Halifax’s report stated results from the latest (July 2020) RICS Residential Market Survey point to an ongoing recovery across the market.

There has been a rise in new buyer enquiries, as well has a rise in newly agreed sales.

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The experts warned against signing up with an agent who is not open about fees.

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