Featured in Property Reporter:
The UK's longest-running monthly
house price index has revealed that the average price of a home in the UK
continued to climb in December, reaching a new high of £253,374. Halifax say
that despite the pace of growth is beginning to slow, prices in December were
6.0% higher than in the same month a year earlier after rising 0.2% between
November and December. In Q4, house prices were 2.6% higher than in the
preceding three months. The market widely expects that these figures will rise
over the next month due to the looming Stamp Duty Holiday deadline, but will
likely settle once it becomes unrealistic to complete a new purchase before
April.
Russell Galley, managing director
at Halifax, comments: “Average houses prices rose again in December, stretching
the current run of continuous gains to six months. However, the monthly rise of
0.2% was the lowest seen during this period and significantly down on the 1.0%
increase in November. The average house price was therefore little changed, but
nonetheless still reached a fresh record of £253,374.
“2020 was a tale of two distinct
halves for the housing market. Following a strong start, the first half was
dominated by the restrictions on movement due to Covid-19, and prices were
subsequently down 0.5% at mid-year as the market effectively ground to a halt.
However, when the market reopened, prices soared as a result of pent-up demand,
a desire amongst buyers for greater space and the time-limited incentive of the
stamp duty holiday. All this left average prices sitting some 6.0% higher at
the end of 2020 when compared to December 2019, a notably strong performance
given the anticipated impact of the pandemic earlier in the year. Whilst the
annual rate of inflation did fall compared to November (+7.6%) to stand at its
lowest level since August, it should be noted that this also reflects a
particularly strong period for house prices towards the end of 2019 as
political uncertainty at that time began to ease.
He concludes: “In
the near-term, and with mortgage approvals still sitting at a 13-year high,
there may be enough residual strength in the market to sustain prices up to the
deadline for the stamp duty holiday and the scaling back of Help to Buy at the
end of March. However, with the pace of the UK’s economic recovery expected to
be constrained by the renewed national lockdown, and unemployment widely
predicted to rise in the coming months, downward pressure on house prices
remains likely as we move through 2021.”
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