UK house prices return to double-digit growth

Labyrinthine Covid Reminder System Is The Real Reason For The Delays

Growth in UK house prices hit double digits again last month, according to an index from the nationwide construction company.

It recorded an annual growth of 10% in November, against 9.9% in October. Prices rose 0.9% month on month, bringing the average UK property value to £ 252,687.

Robert Gardner, Nationwide Chief Economist, said: “House prices are now almost 15% above the level that prevailed in March of last year when the pandemic hit the UK.

“There have been signs of slowing activity in the housing market in recent months; for example, the number of real estate transactions fell by almost 30% over one year in October.

“But that was almost inevitable, given the expiration of the stamp holiday (in England and Northern Ireland) at the end of September, which gave buyers a strong incentive to advance their purchase to avoid an additional tax.

“Indeed, activity has been extremely dynamic in 2021. The number of real estate transactions so far this year has already exceeded the number recorded in 2020 with two months still to go and is in fact approaching the number observed at the same stage in 2007, before the global financial crisis hit.

However, Gardner said the outlook remains uncertain, adding, “It’s unclear what impact the new Omicron variant will have on the economy at large.

“While consumer confidence stabilized in November, sentiment remains well below levels seen during the summer, in part due to a sharp increase in the cost of living. In addition, inflation is expected to increase further, probably around 5% in the coming quarters.

“Even if economic conditions continue to improve, rising interest rates can exert a cold influence on the market. “

Samuel Tombs, UK chief economist at Pantheon Macroeconomics, suggested mortgage rates could rise. Swap rates, which lenders use to price their loans, have gone up and profit margins on home loans are already “very tight by past standards,” he said.

“Of course, the link between changes in mortgage rates and changes in house prices is not stable,” he said.

“Nonetheless, we continue to believe that mortgage rates will rise enough over the next few months to ensure that house prices stagnate in the first half of 2022 and then only increase slowly in the second half, slowing the rate of growth of year after year. prices at around 2.0% by the end of next year.

Tomer Aboody, director of mortgage lender MT Finance, said government support, including the stamp duty holiday and the holiday scheme, had helped support the market.

He added: “The future is slightly uncertain with the ever-changing global situation thanks to Covid and the possibility of interest rate hikes, which will slow growth. “

Guy Gittins, Managing Director of Chestertons Real Estate, said: “As the market saw a great appetite from home hunters just after the summer break, particularly in October, we expect that the number of agreed sales remains high for the remainder of the year and until the first quarter of 2022.


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