UK house prices rise at fastest rate in almost six years

1 Dec 2020

UK house prices rose in November at the fastest annual rate in almost six years, despite the lockdown, according to the Nationwide Building Society, as buyers rushed to take advantage of the stamp duty holiday.

The average residential property price rose to £230,000 in November, up 6.5 per cent compared with the same month last year — the fastest growth rate since January 2015. On a monthly basis, prices were 0.9 per cent higher than in October, the fifth consecutive monthly expansion, Nationwide said.

The annual rate was well above the 5.5 per cent forecast by economists polled by Reuters, who expected a cooling from the 5.8 per cent annual growth in October to reflect the effects of the nationwide lockdown in England and restrictions elsewhere.

David Westgate, group chief executive at the estate agent Andrews Property Group, said that pent-up demand and savings from the stamp duty holiday, which runs until the end of March, had created a “near frenzied property market”.

Ultra-low interest rates and people deciding to move house as a result of a shift toward more homeworking also boosted demand.

Simon Gammon, managing partner of Knight Frank Finance, said: “The nation is engaged in a mass rethink over where to live following two lockdowns . . . activity has been particularly strong in countryside markets as buyers seek better access to green space.”

Tom Scarborough, chief executive of Movewise, a property selling company, said that properties in major cities and those without gardens or outdoor space “haven’t participated in the price boom”. He added that due to large volumes of transactions before the end of the stamp duty holiday on March 31 “there are growing calls for the deadline to be extended”.

With only four months remaining before the end of the tax break on the first £500,000 of any residential property purchase, “vacant and chain-free properties at both ends of the market have become highly prized”, said Nicky Stevenson, managing director at national estate agent group Fine & Country.

The housing market has experienced a boom since the stamp duty holiday was introduced in July. The sector was expected to cool in the autumn given widespread job losses and the economic downturn expected to result from the coronavirus restrictions.

Article by Valentinia Romei at Financial Times.

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