UK house prices rise by most in six years
LONDON: UK house prices rose faster in December than expected to record their biggest annual rise in six years, as tax incentives and COVID-driven appetite for larger homes continued to boost demand, mortgage lender Nationwide said.
House prices rose by 0.8% in December alone, barely declining from the 0.9% recorded in November, and were 7.3% higher than a year earlier, well above the forecast in a Reuters poll for an increase of 6.7%.
Following a collapse in home purchases during the first months of lockdown, there was an increase in the demand for relocation, driven in part by a temporary exemption from property taxes expiring at the end of March.
Nationwide has said that the strength of the housing market is contrasted with weakness in other parts of the economy – especially those exposed to renewed COVID-19 restrictions – and that the outlook for prices in 2021 is highly uncertain.
“Housing market activity is likely to decline, perhaps sharply, in the coming quarters as the labor market weakens as most analysts expect, especially as the stamp duty holiday expires at the end of March,” said countrywide economist Robert Gardner.
So far, the payments and similar support for the self-employed have limited the impact of a historic 26% drop in economic output on the housing market, compared to the earlier expectations of most economists.
Demand for detached houses has risen the most, with an average rise of just over 8% in the last 12 months, while apartment prices have risen by 4%.