In the latest quarter (September to November) house prices were 3.8% higher than in the quarter before (June to August) meaning that the housing market is certainly still moving despite so many other things being different this year. In comparison to 2019 the house prices in November were 7.6% higher than in the same month – this is the strongest price growth that the market has seen since June 2016.
House prices in November were 1.2% higher than in October
House prices rose by more than 1% in November, adding almost £3,000 to the cost of a typical UK home. The average property price is now at around £253,000, meaning that the prices have risen by more than £15,000 since June.
That equates to 6.5% – the strongest gain since 2004
With more mortgages being approved than there have been for 13 years ago or more, the market continues to be shaped by a desire for more space, the move to rural locations and indications of a trend for more home working in the future.
While data around the industry shows agreed sales and new instructions have fallen to their lowest in the past five months, both remain at high levels and well above the figures which are deemed normal for this time of year.
As the deadline for the stamp duty holiday approaches in March 2021, properties sold to home – movers showed a much higher rate of house price inflation (+7.9%) than first-time buyers (+5.8%)”.
This market is unlikely to simmer until the deadline in March at least, at which point the urgency of a potential stamp duty saving will vanish and we will more than likely see the market return to a steadier speed.
The stamp duty saving of £2,500 on a home costing £250,000 is far outweighed by the average increase in property prices since July
The stamp duty holiday has propelled the market back to full health despite bringing its own problems in the form of delays as the industry initially scrambled to cope.
The housing market has shown to be a lot more resilient than many predicted at the beginning of the pandemic, and many households remain confident about further price growth next year. This almost seems irrational on the ever present back drop of paying for the various government measures in response to Covid-19 and the impending fall out of the UK’s departure from the EU.
The economic environment continues to look challenging though unfortunately; with unemployment predicted to peak next year, and the UK’s economy not expected to recover the ground lost over 2020, a reduction in activity in the housing market is also likely over the next 12 months.
It is great to see that confidence within the UK property market has returned and we are now seeing this at all levels of the market. The high-end and foreign buyer demand will help boost an already impressive recovery and hopefully we will continue to see price growth well into next year – despite the uncertainty and turbulence from Brexit and Covid-19.
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