House prices rose 1.6% in August compared to July, and in the period of June to August, were 1.3% higher than March to May, according to the latest Halifax House Price Index.
Year-on-year, house prices in August 2020 rose by 5.2%.
Russell Galley, managing director at Halifax, said: “House prices continued to beat expectations in August, with prices again rising sharply, up by 1.6% on a monthly basis.
Halifax: July shows +3.8% annual house price change
“Annual growth now stands at 5.2%, its strongest level since late 2016, with the average price of a property tipping over £245,000 for the first time on record.
“A surge in market activity has driven up house prices through the post-lockdown summer period, fuelled by the release of pent-up demand, a strong desire amongst some buyers to move to bigger properties, and of course the temporary cut to stamp duty.
“Notwithstanding the various positive factors supporting the market in the short-term, it remains highly unlikely that this level of price inflation will be sustained.
“The macroeconomic picture in the UK should become clearer over the next few months as various government support measures come to an end, and the true scale of the impact of the pandemic on the labour market becomes apparent.
“Rising house prices contrast with the adverse impact of the pandemic on household earnings and with most economic commentators believing that unemployment will continue to rise, we do expect greater downward pressure on house prices in the medium-term.”