The latest national house price index showed house prices rose 10% in the year to November, outpacing the 9.9% rise recorded in October.
Some experts had predicted that the economy would slow after the end of the stamp duty holiday, but those predictions have once again proved wrong.
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“The annual growth rate of house prices in November remained strong at 10.0%, slightly higher than the 9.9% recorded in October. After taking into account seasonal effects, prices rose by 0.9% month-on-month. As a result, house prices are now almost 15% above where they were in March last year, when the pandemic hit the UK,” said Robert Gardner, chief economist at Nationwide.
“There have been some signs of a slight lull in housing market activity in recent months. For example, the number of housing transactions in October was down nearly 30% year-on-year. However, the stamp duty holiday ends at the end of September. Given this, this was almost inevitable, giving buyers a strong incentive to bring their purchases forward to avoid additional taxes.”
The decline in transactions suggests that persistent supply shortages are pushing up prices. Some industry observers believe that prices are likely to remain high as homeowners wait to put their homes on the market, a situation that will continue into next year.
“According to the latest national HPI, average house prices rose slightly by 0.9% month-on-month, or £2,367, the highest rate of increase since May 2021. In the sense that we should be pessimistic “Demand has likely outstripped supply as Christmas approaches, with sellers looking to hold off on putting their homes on the market until after the New Year,” said Ross Counsell, Chartered Surveyor and Director at Goodmove. Ta.
slowing growth
But the prospect of rising interest rates is likely to slow home price growth next year, as real estate prices have soared far outpacing revenue growth and housing affordability has declined.
“Even if economic conditions continue to improve, rising interest rates could dampen the market. In fact, home price growth is significantly faster than income growth, resulting in lower housing affordability is already worse than it was before the pandemic hit,” said Robert Gardner.
