Nationwide report that house prices are 6.5% higher than last year, the steepest rise for nearly six years. The lender explains how despite the economic effects of the coronavirus pandemic the housing market has remained “robust”.
Although the property price growth was anticipated to slow, in November house prices were 0.9% higher than in October with the average property valued at £229,721, the Nationwide said.
Why is this happening?
Some people are looking for a change in lifestyle as working from home becomes the new norm, people are seeking more space and an escape from crowded city life.
The first period of lockdown caused pent-up demand and many buyers are looking to take advantage of the stamp duty holiday.
Robert Gardner, Nationwide’s chief economist, said the economic fall-out from the Covid crisis would eventually be felt in the housing market.
“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,” he said.
“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.”
Andrew Dowden, senior researcher at Property Market Index said “The current spike in the market is being driven by those who already own homes with little debt and their savings they are making form working from home”
He continued to add “When working from home trends start to reverse, stamp duty increases, and mortgage rates will still be higher than their pre-Covid level, house prices are still susceptible to fall next year”