According to new figures from Nationwide, house prices in the U.K. surged to an all-time high in August, fueled by pent-up demand and record low mortgage rates.
Britain’s biggest building society said prices jumped by 2% in August, following a 1.8% rise in July, marking the highest monthly increase since February 2004.
Annual house price growth jumped to 3.7% last month from 1.5% in July.
The average price was £224,123 ($298,864) in August, up from just under £170,000 10 years ago, Nationwide said.
Robert Gardner, Nationwide’s chief economist, said the bounce back in prices reflects the unexpectedly rapid recovery in housing market activity since the easing of lockdown restrictions.
“This rebound reflects several factors. Pent-up demand is coming through, where decisions are taken to move before lockdown is progressing. Behavioral shifts may also be boosting activity, as people reassess their housing needs and preferences as a result of life in lockdown,” he said.
The housing market was hit hard in March at the lockdown height, as estate agents were forced to close their offices, and viewings weren’t allowed.
On Wednesday, Britain’s biggest housebuilder Barratt Developments BDEV, -0.18%, scrapped a special dividend of £175 million in November 2021. First-half profit slumped 46% following “unprecedented disruption” to sales and building activity caused by the pandemic.