UK House Prices Up 2.1% Month-on-Month, Ignoring End of Tax Cut

Source: Nationwide.

UK house prices came back strongly in August, indicating underlying demand and a shortage of homes for sale are driving the market as a tax break on purchases ends. FTSE 250 Index up +0.76%, GBP USD up +0.04%

• The 2.1% jump, the second-largest increase in 15 years, followed a 0.6% decline in July when the tapering of a 12-month stamp-duty holiday pushed the buyers of more expensive homes to a significant tax bill.
• The annual rice growth rate accelerated to 11% from 10.5%. The increase was far stronger than estimates by economists, who expected the phasing out of the stamp-duty holiday in July would continue to weigh on prices in August.
• Mortgage approvals dropped for the second month in July but remained above the pre-pandemic levels.
• UK home prices stood at 248,857 pounds ($342,000) in August, an increase of nearly 25,000 pounds compared with a year earlier.
• As of July 1, the maximum benefit dropped sharply to 2,500 pounds as the tax-free limit was reduced by 50% to 25,000 pounds.