Business

Double-digit home price growth returns as ‘vibrant’ market picks up pace


Home prices unexpectedly returned to double-digit growth last month as the property market continued to maintain an “extremely active” pace, new data showed.

Prices in November were 10 percent higher than in the same month a year ago, according to an index released by lender Nationwide – up slightly from 9.9 percent in October and beating expectations that growth would slowed down to 9.3%.

The latest increase has brought the median house price to £252,687, according to the index.

The UK housing market has been boosted by the tax holiday that has helped the country recover from the early recession of the pandemic, with year-on-year price increases of up to 13% in June, according to Nationwide’s index. this year, according to Nationwide’s index.

There have also been signs that some homeowners are looking to trade short commutes to the office for more spacious homes away from cities as the pandemic changes working patterns.

Volumes took a hit once the tariffs ended but they’ve passed 2020 levels and prices continue to push higher.

Nationwide chief economist Robert Gardner said prices are now almost 15% higher than when the pandemic first hit the UK last March.

“Activity is extremely exciting in 2021,” said Mr. Gardner.

“Initial signs also suggest that labor market conditions remain strong, although the growth plan is due to end at the end of September.

“If this holds, housing market conditions are likely to remain fairly active in the coming months, especially as the market has momentum and scope for continued changes in housing preferences, as a result of the pandemic, to continue to support operations.”

But Mr Gardner added that the “remains uncertain” outlook with the impact of the Omicron variant of COVID-19 on the broader economy was unclear, while higher inflation was dragging on US confidence. consumers and higher interest rates have the potential to create a “cooling effect”.

He also cited the lack of affordability of homes, with home price growth outpacing income growth by “a substantial margin”.

Martin Beck, senior economic adviser at EY ITEM Club, said: “In theory, stamp duty returns to pre-pandemic levels on October 1, which should have impacted house prices.

“However, while there are some signs of cooling in housing market activity, any effect of stamp duty on values ​​appears to have been countered by positives such as changing preferences. housing and a strong job market.”

The figures given are a separate forecast from real estate website Rightmove that predicts that house prices will increase by 5% in 2022, slowing from this year’s increase.

Forecasts suggest prices are driven higher as strong buyer demand meets historically low property availability.

But it also pointed to factors such as “a growing buyer’s affordability” as well as the possibility of interest rate hikes, higher inflation and tax hikes weighing on buyer sentiment.





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