Halifax’s house price index has found that the average house price now stands at £249, 870, a 7.3% rise on last year, and the strongest growth since June 2016. Across the last three months, Britain’s biggest mortgage lender approved more mortgage applications from both first time buyers and homemovers than anytime since 2008.
This follows Nationwide’s recent press release, which reports annual house price growth picked up to 5% in September, the highest rate since the same month in 2016.
The Managing Director of Halifax, Russell Galley, points to the importance of contextualising the annual comparisons, as political uncertainty weighs on the market. Also, although the significant downward pressure on house prices may come later than expected, a variety of factors point to it’s inevitability despite what seems to be a lockdown mini-boom. “It is highly unlikely that the housing market will continue to remain immune to the economic impact of the pandemic . . . And as employment support measures are gradually scaled back beyond the end of October, the spectre of increased unemployment over the winter will come into sharper relief.”
A desire for more space during the public health crisis is fueling the housing market, says Halifax
House prices were 3.3% higher in the last quarter (July to September) than in the preceding three months (April to June), leading many to speculate that the lockdown, Covid homeworking, and a subsequent desire for more space is directly affecting the behaviours and preferences of property buyers in the UK. Also, using pre-pandemic average transaction data, The Center for Economics and Business Research estimates that 150,000 house sales were delayed during the lockdown, suggesting an unprecedented pent up demand did indeed contribute to the surges. They say, “house prices will fall by almost 14% next year once the governments temporary cut in stamp duty ends and the economic impact of the coronavirus filters through to the property market, according to an analysis by an economic consultancy.”
