House prices rose by 7.5 per cent on an annual basis in October, says Halifax.
On a monthly basis, prices rose 0.3 per cent. In September, this figure stood at 1.6 per cent.
The average house price now stands at £250,457, the first time this figure has ever risen above a quarter of a million pounds.
Halifax managing director Russell Galley is of the opinion that this growth is unsustainable. He says: “While government support measures have undoubtedly helped to delay the expected downturn in the housing market, they will not continue indefinitely and, as we move through autumn and into winter, the macroeconomic landscape in the UK remains highly uncertain.
“With a number of clear headwinds facing the housing market, we expect to see greater downward pressure on house prices as we move into 2021.”
James Pendleton property expert Lucy Pendleton comments: “Average house prices may have crashed through a quarter of a million pounds for the first time but the growth rate that got them there is frankly ridiculous.
“There seems little prospect that house prices are really rising this fast nationally, and it’s a dangerous thing to be saying, unless true, because it can scare off first-time buyers, who are the lifeblood of the market.
“The huge demand that has driven the market higher has been fuelled by armies of buyers pumped up by impatience, adrenalin, frustration and relatively cheap borrowing.
“That’s what will take the credit for this continuing surge in prices but we won’t see figures like this for long if we’re lucky. Growth like this is only ever in the interests of a tiny proportion of the population — it’s not good for agents in the long run or consumers.
“A boom followed by a bust in the spring should be avoided at all costs but the higher prices travel, the more likely that is. However, a slowdown in monthly price growth indicates that the market has already started to level off.”
And SPF Private Clients chief executive Mark Harris says: “The impact of Covid is clear, with the flat-to-house price differential never as pronounced as this before. People require more outdoor space and not all flats have roof terraces and balconies.
“But while Covid is having a massive impact it is likely to be temporary in the scheme of things, with people not able to work from home four days a week forever.
“Employers are likely to be more accepting of home working but once we have more normality, they will want to see people in the office more. Those flats that are 20 minutes from the workplace will be more appealing than a house on the Dorset coast if you have to be in the office four times a week.”
Meanwhile, Glenhawk chief executive Guy Harrington casts a warning: “With month-on-month growth slowing considerably, has the UK housing market finally woken up to reality? Or will the March deadline for the stamp duty holiday and changes to Help to Buy, coupled with continued pent up demand, render this month merely a blip?
“Everything points to the former, with falling consumer confidence and a growing belief that we are set for a prolonged period of national lockdowns, whilst the dark cloud on the horizon of an end to furlough rolls ever closer.”
