Annual house price growth in the UK has reached a six-year high in 2020, according to the latest data from Nationwide. The building society’s house price index for December found that property prices across the country were up by 0.8 per cent month-on-month and by 7.3 per cent year-on-year.
Average house prices in the country come in at £230,920, according to the organisation. London, meanwhile, saw its average house prices rise by 6.2 per cent year-on-year. This means that average property prices in the capital now stand at £486,562.
However, despite such a strong performance in 2020, uncertainty remains for UK property markets.
Chief economist at Nationwide Robert Gardner noted that although the Covid-19 pandemic slowed the housing market earlier in the year, it has actually been the reason for its significant bounce in recent months.
“Housing demand has been buoyed by a raft of policy measures and changing preferences in the wake of the pandemic,” he stated, citing the likes of the stamp duty holiday as an example of a policy that has boosted demand for property.
Mr Gardner also pointed out that the pandemic resulted in many people evaluating their homes and their housing needs. “The pandemic itself also boosted activity, as life in lockdown and changes to working patterns led many to re-evaluate their housing needs,” he added.
Nationwide isn’t the only lender to notice a significant annual rise in house prices. The latest data from Halifax also recorded a 7.6 per cent year-on-year increase in average property prices across the UK.
Managing director at Halifax Russell Galley also highlighted the reduction in stamp duty for homemovers as one of the reasons why there has been an influx of buyers and sellers to the market, but he also pointed out that the savings in stamp duty are far outweighed by the increase in property prices.
Despite a surprisingly positive year for the property market, Mr Galley is expecting the sector to encounter more challenges as we move into 2021.
“The economic environment continues to look challenging. With unemployment predicted to peak around the middle of next year, and the UK’s economy not expected to fully recover the ground lost over 2020 for a number of years, a slowdown in housing market activity is likely over the next 12 months,” he asserted.
As the Guardian recently reported, many other industry forecasts also expect the pace of growth within the country’s property market to slow in 2021. Zoopla, Knight Frank and Chestertons are estimating average house price growth of between one and 1.5 per cent in 2021.
Meanwhile Rightmove, which has what the newspaper describes as “the most bullish forecast”, is estimating property price rises of four per cent. This is still far below the average increases recorded in 2020, however.
However, all these forecasts still expect some level of further increase in property prices in the coming 12 months, and as the stamp duty holiday is due to end in March 2021, if you’re considering moving now could be a good time to find home to home estate agents in Forest Hill to help you with your search for a new property.