Average house prices in the UK rose 8.5 per cent in the year to December 2020, the highest annual rate since October 2014.

The ONS House Price Index figures out today show average UK house prices reached a record high of £252,000 in December. A month earlier, in November 2020, prices had risen by 7.1 per cent annually.

In England, house prices increased over the year to £269,000; in Wales they rose to £184,000; in Scotland to £163,000; and in Northern Ireland to £148,000.

The North West was the English region to see the highest annual growth in average house prices (11.2 per cent), while London saw the lowest (3.5 per cent).

However, the ONS says that the impact of the coronavirus pandemic on both the number and supply of housing transactions, may have caused larger revisions to the published House Price Index estimates than usual.

Fine & Country managing director Nicky Stevenson says: “Markets don’t move in straight lines and there’s no doubt there will be fresh challenges this year but there’s still too much pessimism around. One aspect being routinely ignored is the amount that Britons have saved during the past 12 months and the effect that will have in the real economy.

“The Bank of England’s Andy Haldane revealed this month that he expects ‘accidental savings’ to have reached £250bn by June. This won’t just make itself felt on the high street and in our travel agents. It is set to be an instrumental supporting factor for house prices this year.

“To put it in context, £250bn would fund the maximum stamp duty tax break of £15,000 on over 16.7 million sales, which would be enough to cover every purchase in the UK for over 15 years. If the Chancellor does end the scheme as planned at the end of next month, it’s not necessarily all over for healthy house price growth even if some sales do fall through.”