House prices rise as stamp duty break spurs sales

House prices rose to almost £250,000 in September as the stamp duty holiday and shift to homeworking kept the market busy, according to Halifax, which warned that tougher times were looming.

September's 1.6% monthly increase took the average UK house price to £249,870 - 7.3% higher than a year earlierand the strongest growth since June 2016.

Halifax, Britain's biggest mortgage lender, said it received more applications for home loans in the past three months than at any time since 2008. It said people seeking more space to work from home and Chancellor Rishi Sunak's stamp duty break were spurring activity.

The cancellation of stamp duty on the first 500,000 of a property purchase ends in March and Halifax said buyers and sellers were pushing to get sales completed before the deadline. But the lender said the release of pent-up demand after the Covid-19 lockdown would start to wane leaving the market exposed to economic uncertainty and rising unemployment.

Russell Galley, managing director of Halifax, said: "While it may come later than initially anticipated, we continue to believe that significant downward pressure on house prices should be expected at some point in the months ahead as the realities of an economic recession are felt ever more keenly.”

Galley pointed out that the annual rate of increase was boosted by political uncertainty over Brexit weighing on the market in September 2019.

Separately the Office for National Statistics said house prices rose 2.3% in the year to July, down from a 2.3% increase in June.