According to the monthly index, UK house prices went up by 0.9% month-on-month in September, which compares to a 2% increase in August.

Annually, house prices soared by 5% according to Nationwide. This is not only the highest level since September 2016 but comes following annual growth of 3.7% in August.

Robert Gardner, Nationwide’s chief economist, said: “The rebound reflects a number of factors. Pent-up demand is coming through, with decisions taken to move before lockdown now progressing.

“The stamp duty holiday is adding to momentum by bringing purchases forward. Behavioural shifts may also be boosting activity as people reassess their housing needs and preferences as a result of life in lockdown.”

Moving trends

A survey by Nationwide indicated 19% of would-be buyers had put off plans to move because they were concerned about the pandemic. However, it also found 10% were moving because of the pandemic with many hoping to find a home with a garden or outdoor space.

The majority, said Gardner, were looking to move to less urban areas.

Andrew Montlake, managing director of mortgage broker, Coreco, said:  “A lot of people have decent equity and remain in secure jobs and we expect this demographic to maintain a certain level of transactions during the next 12 months as people move out of cities in search of bigger houses and more outdoor space.

“The countryside is the new city, rural the new urban.

“Demand is still strong given the great lull of lockdown and the stamp duty holiday, but unemployment is rising by the day and the economic outlook is highly uncertain.

Hit the peak

Indeed, Montlake was one of a number of individuals who thought the housing market may have hit its peak.

“A 5% annual rise in values sounds fantastic, but the economic fallout of Covid-19 is starting to gather momentum and price growth will soon start to fade,” he said.

“It may not have landed on the nation’s doormat yet, but there’s a whole world of economic pain in the post.”

David Westgate, group chief executive at Andrews Property Group, had a similar view. He said: “5% annual growth is an impressive headline figure but the post-lockdown property market resurgence has now peaked.

“Despite the stamp duty holiday, there are signs that the market is now slowly cooling with tighter lending and first-time buyers being squeezed out.

“There is a significant pipeline of property transactions now tied up and in solicitors’ hands, all waiting to complete before the end of the year to avoid increased stamp duty charges.”