LONDON (Reuters) – British house prices rose by the most in four years in September when they jumped by an annual 5.0%, mortgage lender Nationwide said on Wednesday as a sharp rebound in the country’s housing market accelerated.
The increase was stronger than the median forecast of a 4.5% rise in a Reuters poll of economists and average prices hit a fresh record high.
Britain’s housing market has boomed since the coronavirus lockdown with a rush by some buyers for bigger houses outside of urban areas in the new work-from-home age combining with pent-up demand.
Nationwide said about 10% of people it surveyed in September were in the process of moving as a result of the pandemic, rising to 15% in London. A further 18% of those asked said they were considering moving due to the pandemic.
“Behavioural shifts may also be boosting activity as people reassess their housing needs and preferences as a result of life in lockdown,” Nationwide’s chief economist Robert Gardner said.
Housing industry officials have warned that the mini-boom could run out of steam soon with unemployment expected to rise sharply and COVID-19 cases on the rise again.
Nationwide said prices rose by 0.9% in September from August compared with a forecast of a 0.5% increase in the Reuters poll.
Nationwide said the housing market had also been boosted by finance minister Rishi Sunak’s tax cut on house purchases which he introduced in July as he sought to boost the broader economy after its record 20% contraction between April and June.
Bank of England data published on Tuesday showed mortgage approvals hit their highest in almost 13 years in August.
Reporting by Sarah Young; editing by William Schomberg