Friday, 05 March 2021

Prices hit record high

HOUSE prices at the end of 2020 hit a record high, but the pace of growth has slowed, according to the Halifax house price index.

The average price was £253,374 and prices in December were 0.2 per cent higher than in November.

In the last quarter — October to December — prices were 2.6 per cent higher than the preceding three months, from July to September.

House prices in December were six per cent higher than in the same month a year earlier.

Russell Galley, Halifax managing director, said: “Average houses prices rose again in December, stretching the current run of continuous gains to six months. However, the monthly rise of 0.2 per cent was the lowest seen during this period and significantly down on the one per cent increase in November.

“The average house price was therefore little changed but nonetheless still reached a record of £253,374.

“Last year was a tale of two distinct halves for the housing market. Following a strong start, the first half was dominated by the restrictions on movement due to covid-19 and prices were subsequently down 0.5 per cent at mid-year as the market effectively ground to a halt.

“However, when the market re-opened, prices soared as a result of pent-up demand, a desire among buyers for greater space and the time-limited incentive of the stamp duty holiday.

“All this left average prices sitting some six per cent higher at the end of 2020 when compared with December 2019, a notably strong performance given the anticipated impact of the pandemic earlier in the year.

“While the annual rate of inflation did fall compared with November (plus 7.6 per cent) to stand at its lowest level since August, it should be noted that this also reflects a particularly strong period for house prices towards the end of 2019 as political uncertainty at that time began to ease.

“In the near-term, and with mortgage approvals still sitting at a 13-year high, there may be enough residual strength in the market to sustain prices up to the deadline for the stamp duty holiday and the scaling back of Help to Buy at the end of March.

“However, 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.”