United Kingdom: House price growth rises to six-year high in December
December 30, 2020
According to the Nationwide Building Society, house prices in the United Kingdom rose 0.8% month-on-month in December, following November’s 0.9% rise. On an annual basis, house prices were up 7.3%, the fastest growth in six years (November: +6.5% year-on-year). The average house price in December was GBP 230,920.
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), rock-bottom interest rates and the stamp duty holiday. On the outlook, Robert Gardner, chief economist at Nationwide, stated:
“Behavioural shifts as a result of Covid-19 may continue to provide support for housing market activity, while the stamp duty holiday will continue to provide a near-term boost by bringing forward home moves. However, housing market activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March.”
Author: Oliver Reynolds, Economist