The Daily Telegraph - Business

House prices growing at fastest rate since 2004

- By Melissa Lawford

HOUSE prices grew 7.6pc in the year to November as post-lockdown demand for bigger homes continued to fuel a frothy property market, new data show.

Values have grown 6.5pc in the five months since June, after the housing markets began to reopen – the sharpest rate of growth in any five-month period since 2004, according to lender Halifax.

The average value of a British home has increased by more than £15,000 in this time period to reach £253,243, a record high. Such an increase means price hikes now outweigh the stamp duty cut.

Experts have warned a slowdown is on the horizon. Pent-up demand after the housing market shutdown and a new desire for more space have driven a property buying spree. This was further fired up by the stamp duty holiday announced in July.

Yet buyers must complete on sales by March 31 2021 to benefit from the tax break, which has brought added urgency to the market. House prices climbed 1.2pc between October and November alone.

However, Russell Galley, of Halifax, warned: “With unemployme­nt predicted to peak around the middle of next year, and the UK’s economy not expected to fully recover the ground lost over 2020 for a number of years, a slowdown in housing market activity is likely over the next 12 months.”

So far, the market has been largely insulated from the financial strain of coronaviru­s by support measures such as the furlough scheme and mortgage payment deferrals. According to trade body UK Finance, 127,000 homeowners were on mortgage payment holidays last month.

These schemes will wind down just as the stamp duty holiday ends and the current Help to Buy equity loan scheme is replaced by a less generous version. The possibilit­y of a no-deal Brexit at the end of the year could also hit the economy hard.

While first-time buyers have struggled to take out mortgages in recent months, there are signs that this part of the market is slowly improving. A separate report by Moneyfacts, an industry analyst, found mortgage availabili­ty has increased for the second successive month. The firm said that 378 new deals had launched in the past month. This is the highest percentage increase since November 2014, albeit from a low base.

The number of 90pc mortgages has grown from 56 to 88 since the start of November, as lenders including TSB and Yorkshire Building Society returned to the market.

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