United Kingdom housing market recovers from slowdown as prices jump 2.6% in August

They were 2.6 per cent higher in the three months to the end of August than during the same period a year earlier.

The EY ITEM Club says it retain the view that house prices are unlikely to us to rise by more than 2% over 2017. A small rise of around 2% also looks likely in 2018.

Housing market activity and prices remain under pressure from serious squeeze on consumers, weakened confidence and heightened caution over engaging in major transactions.

The annual change in house prices in near to the lowest level since spring 2013.

And other experts have warned that this and the fact that lenders are ditching low mortgage rates could also cause growth to slowdown.

The Halifax reported house prices spiked 1.1% month-on-month in August.

He noted that Halifax's measure rose by just 0.1% on a three-month-on-three-month basis.

The 1.1% jump was the biggest since December 2016 and followed a 0.7% gain in July.

Annual property price inflation picked up from 2.1 per cent in July to 2.6 per cent last month, but is down substantially on the 8.4 per cent recorded a year ago.

Last week the Bank of England said mortgage approvals were much stronger than expected in July.

United Kingdom house prices increased at a faster pace in August, data from the mortgage lender Halifax and IHS Markit showed Thursday.

"House prices should continue to be supported by low mortgage rates and a continuing shortage of properties for sale over the coming months".

The average house price is now £222,293 and United Kingdom home sales rose to the highest level since March 2016 upon reaching 104,760. In the three months to July, activity was 10% higher than in the same period a year ago.

There is a possibility that potential house buyers may also be concerned by the Bank of England indicating that interest rates could eventually rise more than the markets now expect, although the likelihood of a near-term hike has seemingly receded.

Jeremy Leaf, north London estate agent and former RICS residential chairman, commented: "Before we get too carried away by the numbers it is worth remembering that house-price growth is being underpinned by a shortage of supply, including housebuilding, historically low mortgage rates and relatively low unemployment, rather than strong buyer demand".