UK house price growth jumped to the highest rate in five years this month, as the market continued to experience a post-lockdown bounce.
Annual UK house price growth rose to 5.8 per cent in October, the highest level since January 2015.
Property prices were up 0.8 per cent month-on-month compared to growth of 0.9 per cent in September, according to the latest Nationwide analysis.
Nationwide chief economist Robert Gardner said: “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.
“Behavioural shifts as a result of Covid-19 may provide support for housing market activity, while the stamp duty holiday will continue to provide a near term boost by bringing purchases forward.
“However, 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.”
‘Can’t last forever’
Garrington Property finders chief executive Jonathan Hopper warned that the “momentum can not last forever”.
“The demand is real but it’s being underpinned by two finite, and probably fleeting, factors,” Hopper said.
“The first is that many buyers want to move for chiefly emotional rather than financial reasons – typically the desire for more space, and a better lifestyle, away from the big cities.
“The second is the Stamp Duty holiday. Like all holidays, it will come to an end. And with the tax break due to close at the end of March, we’re now seeing a stampede of buyers trying to get their purchases in train so they will complete in time.
London market remains “robust”
“The housing market has ploughed into the usually quieter autumn period and not even touched the brakes,” said Lucy Pendleton, property expert at estate agent James Pendleton.
“Rumoured trouble in the London market has not materialised. All the major indicators that started punching the top of the dial in late summer are still showing very strongly that a post-lockdown feast in demand is continuing.”
Lockdown sparks surge in home hunters
Dan Leather, real estate partner at law firm Gowling WLG, said:”This spike is undoubtedly supplemented by the stamp duty holiday, but is also symbolic of a more enduring lift in the market as the effects of lockdown come to bear on people’s long-term planning and increased demands on their living space.
“We already know that the house builders and developers are working really hard on design and delivery, to identify and serve the adjusted demands of the purchaser.
“This continues to transition and evolve at pace. This sure makes the new build housing product more attractive than ever before, serving as a further incentive to move and generating activities throughout the new and used housing market.”