Pandemic boom drives UK house prices up by most since 2004

[LONDON] British house prices jumped by the most in more than 16 years this month when they were 13.4 per cent higher than in June last year and demand is expected to remain strong in the coming months, mortgage lender Nationwide said on Tuesday.

In monthly terms, house prices were 0.7 per cent higher than in May as buyers rushed to take advantage of a tax break offered by finance minister Rishi Sunak.

Economists polled by Reuters had expected prices to rise by 13.7 per cent in annual terms and by 0.7 per cent from May.

"While the strength is partly due to base effects, with June last year unusually weak due to the first lockdown, the market continues to show significant momentum," Nationwide's chief economist Robert Gardner said.

The tax break, introduced last year as part of Mr Sunak's emergency support for the economy during the pandemic, had originally been due to expire at the end of March.

But the first 500,000 pounds (S$932,156) of any property purchase in England or Northern Ireland are now due to remain exempt until the end of June, and a 250,000 pound tax-free allowance will run until the end of September.

"Underlying demand is likely to remain solid in the near term as the economy unlocks," Mr Gardner said.

"Consumer confidence has rebounded while borrowing costs remain low. This, combined with a lack of supply on the market, suggests further upward pressure on prices. But as we look toward the end of the year, the outlook is harder to foresee."

REUTERS