Home prices rose at the fastest pace in six years in 2020, according to the National House Price Index.
In December alone, average house prices rose by 0.8% to £230,920 in the UK and £486,562 in London.
The housing market slumped during the first lockdown when viewings were banned, but the market has boomed this year after Rishi Sunak introduced a stamp duty holiday.
Robert Gardner, chief economist at Nationwide, said: “Despite the broader economic recovery losing momentum and the UK economy facing the prospect of further lockdowns and continued uncertainty around the UK’s future international trading relationships. “The housing market has remained strong in recent months.”
“The furlough and self-employment income support schemes provide vital support to the labor market, and a number of measures are helping to keep borrowing costs down and credit supply maintained.”
As people want more space and rush to complete deals before the stamp duty holiday ends, Mark Harris, chief executive of mortgage broker SPF Private Clients, says: He said this rush will continue for some time yet.
“There are some tailwinds and the housing market is making the most of them. Competitive mortgage rates show no signs of disappearing anytime soon, with lenders in particular returning to the 90% loan-to-value region. “This is an added boost for first-time buyers,” he said.
But Nationwide’s chief economist says the outlook is uncertain.
“Much will depend on how the pandemic and containment measures develop, and the effectiveness of policy measures implemented to limit the damage to the broader economy,” he said.
Prices are likely to cool down after the stamp duty holiday, but could pick up steam again as people continue to work remotely and want more space.
George Franks, co-founder of Radstock Property, said: “After a strong first quarter of 2021, prices are likely to fall after the stamp duty deadline, but could start to rise again towards the end of the year. There is a gender,” he said.
