UK house prices reach all-time high – but experts say it’ll come tumbling down

House prices have increased back to pre-March levels, but experts warn of a coronavirus "hangover" crash.

Figures show the property market has seen records smashed with prices jumping in August to the biggest monthly rise in 16 years.

Demand has been off the scale since the market re-opened after a lockdown freeze with house prices hitting an all-time high.

As the summer usually sees Brits heading off on holiday, it won't be the same this year.

In fact, the average home currently costs £224,123, which is 3.7% higher than August 2019, says the Daily Mail.

And last month saw the most homes put on the market since 2008, according to Rightmove.

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This is due to the backlog left from spring when sales were put on hold during lockdown.

Now new buyers are making the most of chancellor Rishi Sunak's temporary stamp duty cut.

And mortgages are cheaper after the Bank of England cut the base rate to 0.1%.

Zoopla says the average time to sell a property has been slashed from 39 days to just 27 since the lockdown.

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However, the UK is currently facing its first recession in 11 years due to the coronavirus crisis.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: "House prices seem to be defying gravity but, later this year, we're likely to find out that the market isn't flying – it's just falling with style.

"Over the next couple of months, as the furlough scheme and mortgage holidays come to an end, jobs will be on the line and borrowers will have incredibly tough decisions to make.

"There are likely to be more forced sellers, a downturn in demand, and the full effect of the crisis will hit the market."

Experts warn house prices will plummet by up to 10% by the end of 2020.

And buyers are facing additional uncertainty as they wait to see how Brexit will play out later this year.

Most experts predict between a 3% and 10% drop in house prices.

Lloyds Bank said its worst case scenario was 20% over three years, but 5% by the end of the year was more likely.

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