UK house price grew 6 per cent on a yearly basis in December 2020, shows new data from Halifax.
This leaves the average house price at £253,374, little changed from November’s average price, due to a monthly rise of just 0.2 per cent.
This is, in fact, the smallest monthly rise seen in the last six months, which have presented continuous gains.
Halifax managing director Russell Galley says that although there may be enough strength in the market to sustain prices until the stamp duty deadline, “with the pace of the UK’s economic recovery expected to be constrained by the renewed national lockdown, and unemployment widely predicted to rise in the coming months, downward pressure on house prices remains likely as we move through 2021.”
However, Radstock Property co-founder George Franks says that while unemployment levels are a threat to property values, “we believe demand will remain relatively strong as it still costs less to own than to rent and borrowing is extraordinarily cheap.
“During 2021, people will also continue to change their living arrangements as companies adapt their remote working policies on a more formal basis.
“Assuming the wheels don’t fall off the economy following our official departure from the EU, then this, coupled with the mass vaccination roll-out, should bolster sentiment around the property market,” he adds.
And James Pendleton property expert Lucy Pendleton comments: “It must be beginning to dawn on the chancellor that the stamp duty tax break was completely unnecessary.
“Any sensible estate agent is hoping the market puts on the brakes before we end up in bubble territory. A housing market has to take the economy with it ultimately, and the threat to the labour market in the second quarter of this year is a major concern.
“The simple truth is that extra space has become non-negotiable for legions of homeowners with families, and the usual winter slowdown has met the immovable force that is hundreds of thousands of people all trying to jump to larger properties at the same time.
“It’s right about now that vendors begin to think of their homes as piggy banks once again, even if agents on the ground are seeing more homes fall short of asking prices. This only leads to tears later on when the chasing pack forces valuations back to a more sensible level, and there are indications in London that this is already beginning to happen.”
Fine & Country managing director Nicky Stevenson adds: “The race for more space is no passing fashion. It looks set to be a seismic shift in priorities that could last a generation and a third national lockdown is only going to solidify that trend.
“People have long memories when it comes to the traumas inflicted in situations like this. Room to spread out is now putting other so-called essentials in the shade and forcing compromises over things that would once have been deemed priorities like en-suites and out-buildings.
“This is forcing buyers to focus on a much longer time horizon that allows them to mentally set aside headaches like Brexit, the pandemic and the end of government support measures.
“The more time passes, the more apparent it becomes that the desire for a larger home is trumping the stamp duty tax break in buyers’ eyes, as it becomes increasingly unlikely that transactions will complete in time to benefit.”
