Property prices growing at fastest rate since 2015 - but end of COVID support may stop trend - Sky News

Property prices are growing at their fastest rate since 2015, with the average price of a house reaching £227,826 in October.

House prices were up 5.8% in October compared to the same time last year, marking the fastest year-on-year growth rate since January 2015, Nationwide Building Society said.

Prices increased by 0.8% month-on-month.

Image: Property prices are surging as demand grows

The market has been boosted by buyers searching for properties with more space following coronavirus lockdowns, which saw millions of people across the country being told to stay home this year.

Another factor is the stamp duty holiday on properties under £500,000, which was brought in by the chancellor to help the market get back on its feet but which has, instead, helped it motor ahead.

Advertisement

The stamp duty holiday expires on 31 March and there are reports that other parts of the home-moving process - such as local authority searches and mortgages - have been significantly slower due to the demand.

Earlier this week, the Bank of England said home mortgage approvals climbed to a 13-year high during September.

More from Covid-19

But there are concerns that house prices could fall again as government support ends for workers and businesses affected by the coronavirus, and again after the stamp duty holiday ends.

It has also been suggested that some buyers might withdraw from transactions early next year if it looks like they will not go through before the deadline.

Image: The chancellor's policy on stamp duty has been cited as a reason for the trends

Robert Gardner, Nationwide's chief economist, said: "Behavioural shifts as a result of COVID-19 may provide support for housing market activity, while the stamp duty holiday will continue to provide a near-term boost by bringing purchases forward.

"However, activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March."

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "The end of the stamp duty deadline is a concern, and needs looking at by the government, although it is focusing buyers' minds on getting deals done in the short term.

"The problem borrowers face is lenders' service levels, with some struggling with the rise in demand. Price and criteria are key when choosing a mortgage, but borrowers must also consider how long a lender is going to take."

Please use Chrome browser for a more accessible video player

Housing sec: 'We need to get country building'

Lucy Pendleton, from estate agent James Pendleton, said: "The only slight change to the picture over the past couple of months is the way demand for outside space and gardens has softened.

"This always happens as we hit autumn, as the inclement weather adjusts buyers' natural focus away from the stage for summer parties and barbecues to cosy interiors.

"The pandemic and subsequent lockdown hasn't been enough to end this trend. However, it does make it easier for agents to sell flats and maisonettes with little or no outside space. It is these homes that are much harder to shift while the sun is shining and people are spending a lot of their free time outside."

Let's block ads! (Why?)

https://news.google.com/__i/rss/rd/articles/CBMifmh0dHBzOi8vbmV3cy5za3kuY29tL3N0b3J5L3Byb3BlcnR5LXByaWNlcy1ncm93aW5nLWF0LWZhc3Rlc3QtcmF0ZS1zaW5jZS0yMDE1LWJ1dC1lbmQtb2YtY292aWQtc3VwcG9ydC1tYXktc3RvcC10cmVuZC0xMjExODY2MNIBggFodHRwczovL25ld3Muc2t5LmNvbS9zdG9yeS9hbXAvcHJvcGVydHktcHJpY2VzLWdyb3dpbmctYXQtZmFzdGVzdC1yYXRlLXNpbmNlLTIwMTUtYnV0LWVuZC1vZi1jb3ZpZC1zdXBwb3J0LW1heS1zdG9wLXRyZW5kLTEyMTE4NjYw?oc=5

2020-10-30 13:14:17Z
52781156021704