1 December 2020
House prices rise at fastest pace in nearly six years
November tends to be one of the quieter months of the year for the housing market, as buyers and sellers are distracted from house moves as they start to focus on the festive period.
But this year it is very different. UK house price growth is at the fastest pace for almost six years, according to the latest figures from Nationwide building society. Pent-up demand, the desire for more space thanks to living with lockdown, and the impending end of the stamp duty holiday, all combined to make November an extremely busy month for the housing market.
Nationwide said house prices were 6.5 per cent higher in November than a year ago, despite the pandemic. Prices were 0.9 per cent higher than in October, with the average property now valued at £229,721. However, Nationwide warned that price growth is expected to slow if unemployment rises quickly once the furlough scheme ends and if the stamp duty holiday is not extended beyond March.
Calls for Chancellor Rishi Sunak to extend the stamp duty concession continue to grow, particularly as it benefits not just those buying a home but the various trades which work across the housing industry, such as builders, decorators, architects, plumbers etc. The performance of the housing market next year also depends on how quickly a vaccine can be introduced and how much damage is done to the economy in the meantime.
Rival lender Halifax revealed yesterday that UK households remain broadly confident in the strength of the property market, with people cautiously optimistic that prices across the country will be higher in 12 months’ time.
For now, activity remains robust with the stamp duty holiday focusing buyers on getting deals done before the end of March. Historic low interest rates show no sign of rising anytime soon, while lenders are also returning to high loan-to-value (LTV) mortgages. With more choice available at 90 per cent LTV, rates could well fall, giving a further boost to this end of the market.