Property prices have skyrocketed in August.

They are increasing at the fastest pace in 16 years.

This is because during lock down there has been pent up demand. As lock down is beginning to ease and the property market is getting back up and running people are looking to buy and sell properties quickly.

This surge in demand can also be attributed to the stamp duty holiday.

According to the Nationwide Building Society, between July and August 2020 house prices have risen by 2%. This is the biggest monthly increase since 2004.

House prices in August 2020 are 3.7% higher than in August 2019, this is the greatest annual increase since the last spike in February 2017. This 3.7% increase makes the average property price £224,000. House prices have never been recorded that high since records began in 1991.

Robert Gardener, Nationwide’s Chief Economist, argues that house prices are reversing the dip that we saw in June. He states that shifts in people’s behaviour may be boosting sales as homeowners and renters are reassessing their housing requirements after spending so much time indoors during lock down.

House prices are rising the most in coastal and country areas as increasing numbers of people desire fresh air and green areas. Research from Zoopla also shows that demand for larger properties in popular areas like London has increased dramatically whereas demand for smaller one bed properties has plummeted.

Low interest rates are also helping potential buyers get on the property market. The cost of borrowing money is very affordable right now. If you combine this with the stamp duty holiday (which means you pay no tax on your first property up to the value of £500,000) the current conditions on buying a property are very favourable. Data published by the bank of England shows that mortgage approvals have jumped to pre pandemic levels.

However, it could be argued that this sudden spike in the property market will be short lived. The economy is very fragile, and the prospect of mass unemployment may impact negatively on the housing market in months to come.