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UK House Prices See Highest Growth Rate for Six Years, Says Nationwide

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Building society Nationwide has found that UK house prices experienced the highest growth rate for six years in 2020, with prices climbing 7.5%.

Despite seeming unlikely at the start of the pandemic, prices ended the year 5.3% above the levels recorded in March.

There has been increased demand for housing due to changing preferences as a result of the pandemic, as well as several new policy measures motivating people to move home.

The average house price in December was £230,920, with prices up 0.8% higher than in November.

Nationwide's chief economist, Robert Gardner, said: "The furlough and Self Employment Income Support schemes provided vital support for the labour market, while a host of measures helped to keep down the cost of borrowing and keep the supply of credit flowing.”

Gardner said that demand was also stimulated by the stamp duty holiday, which encouraged people to bring forward their plans to move.

Lucy Pendleton, of estate agents James Pendleton, said: "The year has ended with a bang and not a whimper. There are still plenty of buyers out there competing with each other for bigger and better properties, and detached homes continue to outperform."

Chief executive of mortgage broker SPF Private Clients, Mark Harris, said: "There are several tailwinds and the housing market is making the most of them.”

Harris said that buyers are seeking more space, particularly to work from home, and are eager to capitalise on the stamp duty holiday if possible.

"Competitive mortgage rates show no sign of disappearing anytime soon, with lenders most notably returning to the 90% loan-to-value space, providing a further boost for first-time buyers,” said Harris.

As for where house prices will go from here, the outlook is “highly uncertain” according to Mr Gardner: "Much will depend on how the pandemic and the measures to contain it evolve as well as the efficacy of policy measures implemented to limit the damage to the wider economy."

Gardner says that changes in behaviour as a result of the pandemic may continue to buoy activity in the housing market.

In the short-term, the stamp duty holiday will also continue to boost sales as people bring forward their plans to move.

Co-founder of estate agents Radstock Property, George Franks, said: "The Stamp Duty time limit is creating a false horizon, which will see prices rise even higher in the first quarter of next year.

"Though rising unemployment levels are an obvious threat to property values, demand should remain relatively strong as it still costs less to own than to rent and money is about as cheap as it gets."

Harry Pererra
Harry Pererra

Harry turns on his experience in journalism and programming to write about the latest news in the world of tech and the environemtn. When he isn’t writing for usave he is working towards his Blue Belt in Brazilian Jiu Jitsu, and prefers dogs to cats.

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