United Kingdom: House price growth rises to multi-year high in October
According to the Nationwide Building Society (NBS), house prices in the United Kingdom rose 0.8% month-on-month in October, following September’s 0.9% rise. On an annual basis, house prices were up 5.8%, the fastest growth since January 2015 (September: +5.0% year-on-year). The average house price in October was GBP 227,826.
Strong housing market dynamics in recent months have likely been driven by Covid-19-induced behavioral shifts (people looking to move to properties with more space due to home working for example) and the stamp duty holiday. These same factors could continue to prop up the market in the near term. That said, Robert Gardner, chief economist at Nationwide, cautioned that the more positive picture may not last:
“The outlook remains highly uncertain and will 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. […] activity is likely to slow in the coming quarters, perhaps sharply, if the labor market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March.”