UK house prices rose 7.6 per cent on an annual basis in November 2020, data from HM Land Registry shows.
It adds that between October 2020 and November 2020, the average house price in the UK grew 1.2 per cent. This means that the average property is now valued at £249,633.
London was home to the biggest yearly gains, where prices rose 9.7 per cent, giving an average property price of £513,997.
Meanwhile, the average house price in England rose 7.6 per cent annually, meaning the average property value came in at £266,742.
In Wales, house prices 7 per cent in the same time frame, meaning prospective buyers and seller are now looking at average prices of £180,229.
Of all regions measured, the East of England saw the lowest annual price growth in November 2020, although this still came in at 4.8 per cent.
Despite these high headline figures, some in the industry are pleading for caution. MT Finance commercial director Gareth Lewis says: “While price rises are gratifying for homeowners, these consistent increases in values are storing up problems for the future. How are first-time buyers in particular going to get on the housing ladder without significant help from the Bank of Mum and Dad?
“Incomes are rising but not at anything like the pace of house prices. We welcome the demand to move and transact but there are longer-term issues that the government needs to address at some point.”
And Kelly Williams UK chief executive Ben Taylor says: “Although homebuyers have remained focussed on the current stamp duty holiday, the underlying issue of mortgage availability has been growing in the background.
“Many buyers have been scrambling to purchase and finding that they’re simply not in a strong enough position to do so financially, as lenders tighten their lending criteria, particularly for those with a larger degree of financial instability.
“While the market remains in rude health, any wobble in house price appreciation is going to come as a result of declining demand due to mortgage restrictions, rather than the expiration of the stamp duty holiday.”
Meanwhile, Fine & County managing director Nicky Stevenson comments: “The hunger to move because of repeated lockdowns is being underpriced and levels of agreed sales reported since November do still point to a resilient market. We will only have to wait a couple of weeks to see if this has continued through January, which is when most buyers could no longer really hope to transact in time.
“It remains to be seen how many buyers really will pull out of purchases if they can’t claim the relief. Widespread renegotiations up and down chains are probably a more realistic outcome. When you’ve found the perfect house, it’s easy to say you’ll walk away but it’s much harder to do. Remember that most first-time buyers already benefited from a significant stamp duty discount even before the scheme began.”
She adds: “One headwind for the market that has been largely ignored concerns a huge drop in the UK’s population. In the past week, the Economic Statistics Centre of Excellence said official statistics had missed the fact that the population hadn’t grown last year but had actually fallen 1.3m since the pandemic began, aided by an exodus of over half a million foreign-born residents.
“It said that this represented the largest fall in the UK resident population since World War 2. This could have a dramatic impact on demand, even if that loss first makes itself felt in the rental market, with better value rentals reducing overall purchase demand.”
