House prices are at an all-time high due to coronavirus - this is why
Nationwide bank has said that house prices have seen the highest monthly rise in more than 16 years as a result of the coronavirus crisis.
After suffering losses during May and June, house prices have recovered much quicker than expected, meaning they've now reached an all-time high.
"House prices have now reversed the losses recorded in May and June and are at a new all-time high," said Nationwide's chief economist, Robert Gardner.
August saw prices rise by around 2 per cent last month, taking the average price of a house to around £224,123.
One of the reasons for the fluctuation in prices is the coronavirus lockdown, which led to pent-up demand from buyers who suddenly found the housing market frozen.
The temporary suspension of stamp duty on some houses in England and Northern Ireland also encouraged some potential buyers to accelerate their search in order to save cash.
The number of house sales is also still low compared to other years, which makes house prices more volatile.
It has been predicted, however, that there'll be a drop in prices again when the economic impact of coronavirus hits jobs - an event which will likely coincide with the easing of stored-up lockdown demand.
Nationwide have commented that the housing market's recovery has been "unexpectedly rapid".
Figures show that the price increase in August was the highest since February 2004, when house prices rose by 2.7%.
Halifax, a rival mortgage lender, has suggested that they've seen a similar rise in prices over the summer.
The rise is bad news for first-time buyers, many of whom will now struggle to secure a mortgage with lenders tightening criteria for loans.
Those unable to offer a large deposit, and those whose job may be at risk during the recession will likely find it harder to buy a home than they would have prior to the pandemic.
Mr Gardner told the BBC:
"This rebound reflects a number of factors. Pent-up demand is coming through, where decisions taken to move before lockdown are progressing".
He further added that "behavioural shifts" could be boosting housing activity as people reassess their post-lockdown needs.
Some estate agents have, for instance, noted a rise in enquiries about rural properties as many seek to escape city life for a more comfortable home-working setup.
"These trends look set to continue in the near term, further boosted by the recently announced stamp duty holiday, which will serve to bring some activity forward", he said.
"However, most forecasters expect labour market conditions to weaken significantly in the quarters ahead as a result of the after-effects of the pandemic and as government support schemes wind down.
"If this comes to pass, it would likely dampen housing activity once again in the quarters ahead."