Wealth Management News

House price growth hits six-year high at the end of 2020

UK house price growth hit a six-year high at the end of the last year, as the Chancellor’s COVID-related stamp duty holiday pushes prices up.

Nationwide recently published its latest house price index, which showed that annual house price growth hit a high of 7.3 per cent in December 2020, up from 6.5 per cent in the preceding month.

According to the building society’s latest study, this meant the price of the average house rose from £229,721 in November to £230,920 in December.

Combined with other increases throughout the year, this meant that house prices ended the year 5.3 per cent higher than they were when the Coronavirus crisis began in March 2020.

The latest data showed that all regions of the UK saw house price growth in the final quarter of 2020, with the East Midlands performing the strongest.

Robert Gardner, Chief Economist at Nationwide, said: “Indeed, housing market activity almost ground to a complete halt during the first lockdown as the wider economy shrank by an unprecedented 26 per cent.

“But, since then, housing demand has been buoyed by a raft of policy measures and changing preferences in the wake of the pandemic.”

He pointed to the Government’s furlough and self-employed support schemes providing “vital support for the labour market” tied to the sustained low cost of borrowing thanks to historically low interest rates.

Looking ahead, Mr Gardner said: “However, housing market activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March.”

His comments were made ahead of the latest lockdown, the effects of which on the property market are as yet unknown.

Link: Nationwide’s House Price Index