British house prices rose 2.1 per cent in August on the month, indicating robust demand and a shortage of homes for sales are boosting the market despite the tapering of the stamp duty holiday on purchases.
The price increase is the second largest gain in 15 years and follows a 0.6 per cent decline in July when the easing of the tax break left buyers of more expensive homes with a bigger levy to pay.
The annual pace of growth accelerated to 11 per cent from 10.5 per cent, with values now 13 per cent higher than before the pandemic and the average house price nearing the £350,000 ($481,867) mark at £248,857.
Robert Gardner, Nationwide's chief economist, described the August bounce back as “surprising” because the tapering of stamp duty relief in England at the end of June was expected to “take some of the heat out of the market".
“The monthly price increase was substantial — at 2.1 per cent, it was the second largest monthly gain in 15 years after the 2.3 per cent monthly rise recorded in April this year,” Mr Gardner said.
“The strength may reflect strong demand from those buying a property priced between £125,000 and £250,000 who are looking to take advantage of the stamp duty relief in place until the end of September, though the maximum savings are substantially lower - £2,500 compared to a maximum saving of £15,000 on a property valued at £500,000 before the stamp duty relief in England tapered.”
Mr Gardner said a lack of supply was also likely to have been a key factor behind August’s price increase, with estate agents reporting low numbers of properties on their books.
Under the tax incentive programme introduced by Chancellor of the Exchequer Rishi Sunak in July last year, the first £500,000 of any property purchase in England or Northern Ireland was exempt from stamp duty until the end of June, with similar measures offered in Scotland and Wales.
A £250,000 tax-free allowance will expire on September 30 in England and Northern Ireland, with most experts expecting the market to slow once the incentive is removed.
Mortgage approvals — an indicator of future activity — fell for a second month in July, with British lenders approving 75,152 loans a drop of 6.4 per cent from the 80,272 recorded in June — the lowest level in a year, according to Bank of England data.
But mortgage approvals remained well above pre-pandemic levels, with Mr Gardner expecting underlying demand to remain solid in the near term.
This comes as business confidence hit its highest level since April 2017 in August, according to a survey by Lloyds Bank, amid hopes the economy is recovering strongly to pre-pandemic levels despite concerns about staff shortages and supply chain challenges.
“Consumer confidence has rebounded in recent months while borrowing costs remain low,” Mr Gardner said.
“This, combined with the lack of supply on the market, suggests continued support for house prices.”
A recent report from the think tank, the Resolution Foundation, said it “was wide of the mark” to suggest the tax break was the sole driver of rising prices.
Instead the study found that pandemic-related factors, such as low interest rates and a lockdown-induced desire for more space would continue to drive up prices.
Looking further ahead, however, the picture is less clear with Nationwide expecting activity to soften for a period after the stamp duty holiday expires at the end of September.
“Moreover, underlying demand is likely to soften around the turn of the year if unemployment rises, as most analysts expect, when government support schemes wind down. But even this is far from assured,” Mr Gardner said.
“The labour market has remained remarkably resilient to date and, even if it does weaken, there is scope for shifts in housing preferences as a result of the pandemic to continue to support activity for some time yet.
How to keep control of your emotions
If your investment decisions are being dictated by emotions such as fear, greed, hope, frustration and boredom, it is time for a rethink, Chris Beauchamp, chief market analyst at online trading platform IG, says.
Greed
Greedy investors trade beyond their means, open more positions than usual or hold on to positions too long to chase an even greater gain. “All too often, they incur a heavy loss and may even wipe out the profit already made.
Tip: Ignore the short-term hype, noise and froth and invest for the long-term plan, based on sound fundamentals.
Fear
The risk of making a loss can cloud decision-making. “This can cause you to close out a position too early, or miss out on a profit by being too afraid to open a trade,” he says.
Tip: Start with a plan, and stick to it. For added security, consider placing stops to reduce any losses and limits to lock in profits.
Hope
While all traders need hope to start trading, excessive optimism can backfire. Too many traders hold on to a losing trade because they believe that it will reverse its trend and become profitable.
Tip: Set realistic goals. Be happy with what you have earned, rather than frustrated by what you could have earned.
Frustration
Traders can get annoyed when the markets have behaved in unexpected ways and generates losses or fails to deliver anticipated gains.
Tip: Accept in advance that asset price movements are completely unpredictable and you will suffer losses at some point. These can be managed, say, by attaching stops and limits to your trades.
Boredom
Too many investors buy and sell because they want something to do. They are trading as entertainment, rather than in the hope of making money. As well as making bad decisions, the extra dealing charges eat into returns.
Tip: Open an online demo account and get your thrills without risking real money.
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Timeline
2012-2015
The company offers payments/bribes to win key contracts in the Middle East
May 2017
The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts
September 2021
Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act
October 2021
Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence
December 2024
Petrofac enters into comprehensive restructuring to strengthen the financial position of the group
May 2025
The High Court of England and Wales approves the company’s restructuring plan
July 2025
The Court of Appeal issues a judgment challenging parts of the restructuring plan
August 2025
Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision
October 2025
Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange
November 2025
180 Petrofac employees laid off in the UAE
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Where to buy
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MATCH INFO
Uefa Champions League, last-16, second leg (first-leg scores in brackets):
PSG (2) v Manchester United (0)
Midnight (Thursday), BeIN Sports
RESULTS
6.30pm Al Maktoum Challenge Round-2 – Group 1 (PA) $49,000 (Dirt) 1,900m
Winner RB Frynchh Dude, Pat Cosgrave (jockey), Helal Al Alawi (trainer)
7.05pm Al Bastakiya Trial – Conditions (TB) $50,000 (D) 1,900m
Winner El Patriota, Vagner Leal, Antonio Cintra
7.40pm Zabeel Turf – Listed (TB) $88,000 (Turf) 2,000m
Winner Ya Hayati, Mickael Barzalona, Charlie Appleby
8.15pm Cape Verdi – Group 2 (TB) $163,000 (T) 1,600m
Winner Althiqa, James Doyle, Charlie Appleby
8.50pm UAE 1000 Guineas – Listed (TB) $125,000 (D) 1,600m
Winner Soft Whisper, Frankie Dettori, Saeed bin Suroor
9.25pm Handicap (TB) $68,000 (T) 1,600m
Winner Bedouin’s Story, Frankie Dettori, Saeed bin Suroor
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
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