The end-of-year buoyancy is being attributed to the increased certainty inspired by the Conservative election win – something many are describing as the ‘Boris Bounce’.
Over the month to December, house prices also increased by 1.7%, which Halifax said was the biggest monthly increase of 2019.
It means the average price of a house in the UK currently stands at £238,963, which compares to £229,827 in December 2018, according to Halifax.
Russell Galley, managing director of Halifax, said the hike in prices at the end of the year was a reflection of the fact December 2018 was a particularly weak month.
But many mortgage and housing market experts thought the general election result was the crucial factor.
Mark Harris, chief executive of mortgage broker, SPF Private Clients, also thought it was a result of mortgage lenders offering cut-price deals.
“It also helped,” he added, “that buyers and sellers who have had enough of all the delays decided to just get on with their transactions.”
Outlook for 2020
Harris thought the signs looked ‘encouraging’ for 2020 as lenders were keen to lend and plenty of money was available to do so. “It’s a good time to be a borrower,” he added.
Indeed, Halifax’s forecast was that the uncertainty we have experienced in the economy in the past few years would ease and this would help with further price growth.
Galley added: “Longer-term issues such as shortage of homes for sale and low levels of house building will continue to limit supply, while ongoing challenges faced by prospective buyers in raising deposits will serve to constrain demand.
“As a result, we expect modest price gains to continue next year.”
First-time buyers
While anyone selling a house will benefit from these gains, there are concerns the sudden price increase will be less welcoming for first-time buyers.
Josef Wasinski, co-founder of Wayhome, a company which helps first-time buyers take their first steps towards owning a home, said it would push homeownership further away for those first-time buyers desperate to get out of the ‘rent-trap’.
“First-time buyers now need the support promised by the Conservative Government during the election campaign,” he added.
“We need to see genuine change in the housing market which can provide credible, affordable routes to homeownership.”
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