House price growth accelerates despite lockdown

House price growth accelerates despite lockdown
Credit: Jason Alden/Bloomberg

Annual house price growth hit a five-year high of 6.5 per cent in November, despite national coronavirus restrictions that saw England enter a month-long lockdown.

Nationwide’s house price index for November, published today (December 1), showed annual house price growth reached its highest rate since January 2015.

Month-on-month house prices were also up 0.9 per cent, after taking account of seasonal effects.

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The average price of a property in November reached £229,721, according to the building society.

Sam Mitchell, CEO of online estate agent Strike, said: “House prices defied the usual signs of a seasonal slowdown in November. It’s clear to see that, despite tougher lockdown restrictions, the stamp duty holiday is continuing to work its magic in helping Britain’s property market bounce back.”

But Robert Gardner, chief economist at Nationwide, warned the outlook remains “highly uncertain”.

He added: “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, housing market 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.”

Miles Robinson, head of mortgages at Trussle, said a potential fall in house prices could be beneficial to first-time buyers, amid high LTV products returning to the market.

Yorkshire Building Society, for example, launched a range of 90 per cent LTV mortgages for first-time buyers, homemovers and remortgage customers last week.

Mark Harris, chief executive of SPF Private Clients, said the increased availability of 90 per cent LTV mortgages “should help bring down rates on high LTVs, making those deals more accessible, and further boosting the market, at least in the short term.”

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