House prices rose 0.8% in December compared with the previous month
UK house prices climbed 7.5% in 2020, the highest growth rate for six years, building society Nationwide found.
Prices ended the year 5.3% above the level prevailing in March, a resilience that seemed unlikely at the start of the pandemic, it said.
Housing demand has been buoyed by a raft of policy measures and changing preferences due to the pandemic.
House prices were 0.8% higher in December than November, with the average property valued at £230,920.
The furlough and Self Employment Income Support schemes provided vital support for the labour market, while a host of measures helped to keep down the cost of borrowing and keep the supply of credit flowing, said Robert Gardner, Nationwide’s chief economist. The stamp duty holiday also stimulated demand, by bringing forward peoples’ home-moving plans.
Lenders also responded by offering payment holidays to borrowers impacted by the pandemic, helping people stay in their homes rather than potentially being forced to sell.
The year has ended with a bang and not a whimper, said Lucy Pendleton, property expert at independent estate agents James Pendleton. There are still plenty of buyers out there competing with each other for bigger and better properties, and detached homes continue to outperform.
She said that is continuing to spur high house price growth even though buyers know they are likely to miss out on the stamp duty tax break, as conveyancing is still taking a relatively long time.
There are several tailwinds and the housing market is making the most of them, said Mark Harris, chief executive of mortgage broker SPF Private Clients.
He said buyers require more space – both inside and out for the family and to work from home – and are keen to take advantage of the stamp duty holiday if they can. Competitive mortgage rates show no sign of disappearing anytime soon, with lenders most notably returning to the 90% loan-to-value space, providing a further boost for first-time buyers.
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