House prices increase at fastest pace in five years

THE stamp duty holiday and pent-up demand after l ockdown pushed 12-month house price growth to a fiveyear high of 5.8pc in October.

The average British home cost £227,826 this month, a jump of 0.8pc from September, according to Nationwide building society’s house price index.

Homes now cost £12,458 more than they did a year ago. But experts have warned activity could stop “sharply” and prices could fall.

Robert Gardner, of Nationwide, said t hat t he outlook f or t he market remained “highly uncertain” as unemployment rose and Britain’s economic recovery slowed.

The future of house prices would depend “heavily on how the pandemic and the measures to contain it evolve as well as the efficacy of policy measures implemented to limit the damage to the wider economy,” Mr Gardner said.

Economic growth in August slowed to 2.1pc f rom a rate of 6.4pc in July. Unemployment in August hit 4.5pc and the furlough scheme, which is still supporting the wages of an estimated 2m people, ends today. Mr Gardner said housing market activity would slow in the coming months, sharply, if the labour market weakened as most analysts expect. It would definitely slow down once the stamp duty holiday expired at the end of March, he added.

Concern is mounting that the cliffedge March 31 tax deadline will cripple the market. Buyers are rushing to transact to take advantage of savings while the industry’s processing capacity has been reduced due to working from home. Delays are significant and data company Twentyci has estimated some 325,000 buyers would miss the tax deadline altogether.

Earlier this week, the Home Buying and Selling Group, along with a selection of estate agents, surveyors, conveya ncers, mortgage a dvi s e r s a nd solicitors, wrote to Rishi Sunak, the Chancellor, urging him to extend the deadline to prevent “consumer detriment”.

Meanwhile, landlords are bracing for further losses as the furlough scheme ends, with research from the Resolution Society showing one in eight renters are unable to meet their housing costs.