According to the latest data from mortgage lender Nationwide, house prices have grown by as much as 15% since the pandemic began back in March 2020.
And in just the last month prices climbed by 0.9% which compares to 0.7% in October. Indeed, annual price growth also fell slightly October when prices rose by 9.9% over the year.
However, the 10% increase in the year to November shows prices are back on their upward trajectory following a ‘blip’ in October created by the Stamp Duty Holiday deadline.
Robert Gardner, chief economist for Nationwide’s, explained: “There have been some signs of cooling in housing market activity in recent months. For example, the number of housing transactions were down almost 30% year-on-year in October.
“But this was almost inevitable, given the expiry of the Stamp Duty holiday at the end of September, which gave buyers a strong incentive to bring forward their purchase to avoid additional tax.
“Indeed, activity has been extremely buoyant in 2021. The number of housing transactions so far this year has already exceeded the number recorded in 2020 with two months still to go and is actually tracking close to the number seen at the same stage in 2007, before the global financial crisis struck (see chart in attached).”
Other indicators of a strong market are also in place including high numbers of mortgage approvals and good levels of employment.
Robert said: “If this is maintained, housing market conditions may remain fairly buoyant in the coming months, especially since the market has momentum and there is scope for ongoing shifts in housing preferences, as a result of the pandemic, to continue to support activity.”
Despite this the long-term outlook is more uncertain, he said, especially with the emergence of the Omicron variant.
Low supply of homes for sale
Nicky Stevenson, managing director at national estate agent Fine & Country, said one factor influencing prices was the lack of supply of properties for sale.
She said: “House prices remain stubbornly high despite transaction levels beginning to relax following the record surge in activity earlier in the year.
“A poor supply of housing stock has been insufficient to meet the scramble for bigger homes with more outdoor space, and it’s too early yet to predict whether the new strain of Covid will dampen price growth in the future.
“While there’s certainly no evidence that we may be about to move into lower gears, we could experience an easing off from double digit growth in the months ahead.
“For the time being, the market remains buoyant and prices continue to skyrocket.”
Loading ...