Annual house price growth strongest since 2016

The average house price in August was £245,747, which is a 5.2% increase on the same month in 2019, and 1.6% higher than the average price last month.

Factors such as a release of pent-up demand, a desire to move to bigger properties and the temporary cut on Stamp Duty have all contributed to the upward pressure.

However, uncertainty about the longer economic outlook is likely to put a greater downward pressure on prices in the medium term, according to the index.

Halifax also highlighted data from the Bank of England that shows mortgage approvals returned to pre-lockdown levels during July. The number of mortgages approved to finance house purchases was 66,281 during that month, a 66% percent increase from June.

Russell Galley, managing director of Halifax, said: “House prices continued to beat expectations in August, with prices again rising sharply. Annual growth now stands at its strongest level since late 2016, with the average price of a property tipping over £245,000 for the first time on record.”

“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.”

The latest index from Halifax indicated that a recovery was continuing from its last index, while Nationwide’s own index on house prices also showed that prices had surged to an "all-time high".