UK house prices hit ‘four-year high’ to £245K but experts warn of ‘cooling off’ signs
House prices: Chartered Surveyor discusses impact of lockdown
The latest house price index from ONS has recorded average house prices surging across England, Scotland, Wales and Northern Ireland. Average house prices over the year in England surged 5.4 percent in England to £262,000; 5.8 percent in Wales to £176,000; six percent in Scotland to £163,000; and 2.4 percent in Northern Ireland to £143,000. The figures were calculated using data from HM Land Registry, Registers of Scotland, and Land and Property Services Northern Ireland.
The average house prices in the UK increased by 5.4 percent in the year of October 2020 which is up from 4.3 percent in the year to September 2020.
The latest data from ONS is based on completed housing transactions only and will reflect agreements made after the stamp duty holiday was put in place.
Earlier this year, Britons were advised not to move house while the UK was in lockdown.
ONS said this could have led to pent-up demand and an increase in house prices.
It’s also likely the pandemic made buyers reassess their housing preferences according to the ONS.
We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.
Their data saw that preferences for detached property has increased by 6.8 percent in the year to October.
The average UK house price in October 2020 was £245,000 – £13,000 higher than October 2019.
Certain regions in England saw the biggest increase in house prices including the East Midlands, Yorkshire and The Humber and the Northwest.
Average house prices across the three regions increased by 6.6 percent in the year to October 2020.
The lowest annual growth was in the east of England where house prices increased by just 3.4 percent over the year to October 2020.
Unsurprisingly, London house prices remained the most pricey with an average property costing just shy of half a million at £491,000.
DON’T MISS
House prices: Rightmove predicts 4% ‘price rise’ in 2021 [INSIGHT]
England rental prices spike to ‘highest ever recorded’ [UPDATE]
House prices: No deal Brexit ‘won’t impact property market’ [ANALYSIS]
Meanwhile, the Northeast had the lowest average house price at £136,000.
Although this year has seen the property market remain largely buoyant, experts have warned this could soon change.
Nicky Stevenson, Managing Director at national estate agent group Fine & Country, said the market is already showing signs of “cooling off”.
“It was never the case that this unexpected pandemic mini-boom would continue forever and we’re already seeing signs of this property frenzy cooling off,” she said.
“In fact a lot has changed in the past two months. The initial surge of buyers motivated by a desire for more space and the chance to capitalise on the stamp duty holiday has already now passed.”
New figures from Rightmove this week have revealed that asking prices have fallen by 0.6 percent in December, in a “second monthly decline”, according to Ms Stevenson.
However, she reassured that the declines are just a “normal loss of momentum after a period of exceptional growth”.
She added: “While asking prices can be notoriously slow to adjust, particularly among overzealous vendors who want to believe the bull run will never end, this spells good news in that a hard landing next year can be avoided.
“Significant outright price falls remain unlikely in 2021, although the appetite for larger properties is here for the long haul and will continue to disguise the underlying performance of the market to some degree.”
Meanwhile, Jamie Durham, economist at PwC, said the next few months will remain busy as buyers take advance of the stamp duty holiday but that the covid vaccine could mitigate any rusk of a severe drop in house prices.
He added: “However, there is a risk that activity could drop off sharply after March when the stamp duty holiday comes to an end and the cost of purchasing a home increases again.
“The end of the furlough scheme and the possibility that we do not agree a deal with the EU are also risks to the outlook, as both could squeeze incomes.”
David Westgate, Group Chief Executive at Andrews Property Group said house prices are being driven upward by the SDLT holiday but that unemployment rates and a “messy” no deal Brexit could see average values “cool off”.
He continued: “Rising redundancies and reduced mortgage availability at higher loan to values will invariably hit demand but the feel-good factor generated by a working vaccine, coupled with the continued lack of supply, could prevent the steep drop in prices some are expecting.
“With the stamp duty holiday, the government has arguably created a rod for its own back as we are now facing a potential cliff-edge scenario for activity levels and prices at the end of March.
“The first quarter of 2021 could see activity levels reach fever pitch before dropping off during the spring.”
Source: Read Full Article