North leads the way on house price growth

Property portal Zoopla say that market conditions continue to defy the traditional festive lull with demand in the last four weeks up 33 per cent on the same period in 2019, when the market was preoccupied with the General Election.

Across the whole of 2020, Zoopla has recorded 40 per cent more demand for housing than in 2019, despite all activity ceasing during the two month housing market closure.

Fuelled by a search for space and desirability of location, the pandemic and its subsequent lockdowns have unlocked latent demand for housing with even more focus on the size and quality of homes.

Zoopla say demand is proving committed rather than speculative and is converting readily into sales agreed. While demand is up 40 per cent over 2020, the flow of new supply has increased by just four per cent, creating a supply and demand imbalance, and putting upward pressure on house prices.

The rebound in sales has been strongest in the South-East and Eastern England, where they are more than 20 per cent higher than in 2019.

Rising demand for homes with no major expansion in their supply has resulted in upward pressure on house prices in 2020. UK average house price inflation reached a three year high of 3.9 per cent in November, up from 1.3 per cent a year ago.

The impetus for house price growth is coming from the northern regions and Wales, where affordability remains less of a barrier to house price growth, at least for the moment.

Average prices in the NorthWest have increased by five per cent this year, followed by Wales and Yorkshire, both at 4.9 per cent. At a city level, Manchester is registering growth of 5.7 per cent followed by Leeds, Nottingham and Liverpool, all recording growth over five per cent.