Monthly increase of 0.7% comes after Nationwide reported ‘surprise’ increase last week

House prices rose by 0.7% to a new all-time high in August, according to the latest data from the Halifax.

The figures released this morning from the mortgage lender appear to support last week’s data from Nationwide, which reported a “surprise” house price rise of 2.1% last month.

However, while prices grew in the month, Halifax’s figures said that the much bigger price rises seen at the same time last year meant prices were now up by 7.1% annually, the lowest year-on-year rise recorded since March.

In May annual house price inflation recorded by the Halifax topped out at just below 10%. The average price in August of £262,954 is £23,600 higher than that recorded prior to the pandemic.

The data suggesting prices are still rising comes after a range of reports suggesting the market is slowly weakening following the end of the temporary stamp duty exemption for house sales between £250,000 and £500,000

The Halifax said the price rises were currently strongest in Wales, the South-west and the North-east, where annual price inflation is running at 11.6%, 9.6% and 8% respectively.

London was the only part of the country to see prices fall in August, and Halifax said prices there were up just 1.3% on the same month last year.

Russell Galley, managing director at the Halifax, described August’s rise as “relatively modest”, adding that much of the impact from the stamp duty holiday has now left the market, with a drop in industry transaction numbers compared with a year ago.

However, he said other drivers of house price inflation – such as the demand for more space amid greater home working – appeared “set to persist”, meaning there was no immediate prospect of significant price falls.

Galley added: “Moreover, the macro-economic environment is becoming increasingly positive, with job vacancies at a record high and consumer confidence returning to pre-pandemic levels.

“Coupled with a supply of properties for sale that looks increasingly tight, and barring any reimposition of lockdown measures or a significant increase in unemployment as job support schemes are unwound later this year, these factors should continue to support prices in the near term,” he said.