House prices are surging back in the UK and the pace is set to pick up further in coming months, the results of a closely-followed survey revealed.
Nevertheless, activity could slow, perhaps sharply, should unemployment jump at the end of 2021 as many economists were expecting.
According to mortgage lender Nationwide, house prices jumped at a 2.1% month-on-month pace in April to reach £238,831.
That pushed the year-on-year rate of increase in prices from 5.7% for March to 7.1%.
The most recent peak in prices was the 7.3% gain seen in December.
According to Robert Gardner at Nationwide, prices were set to rise at a double-digit clip in June even should prices remained flat over the next two months.
The extension of the stamp duty holiday in the Budget was a factor at play, but not the main one.
“Our research suggests that while the stamp duty holiday is impacting the timing of housing transactions, for most people it is not the key motivating factor prompting them to move in the first place,” Nationwide chief economist, Robert Garnder, said.
Commenting on the outlook, Gardner added: “Further ahead, the outlook for the market is far more uncertain. If unemployment rises sharply towards the end of the year as most analysts expect, there is scope for activity to slow, perhaps sharply.
“However, shifts in housing preferences [as a result of the pandemic] may continue to support activity, even if labour market conditions weaken.”
