The price of homes has increased by 5.8% so far this year
Annual home price growth has risen to 5.8% year-to-date, according to the Nationwide Home Price Index. This represents a growth increase of 5.0% in September 2020.
Monthly price growth has slowed from 0.9% between August and September to 0.8% between September and October.
“The economic recovery has lost momentum.”
Robert Gardner, the chief economist at Nationwide, said: “The data suggests that the economic recovery has lost momentum in recent months with a sharp slowdown in economic growth to 2.1% in August, down from 6.4% in July, despite a strong Boost to the hotel sector from the Eat Out to Help Out Scheme, which has now expired.”
“Labour market conditions also weakened with the unemployment rate rising to 4.5% in the three months through August, still low by historical standards, but above an average of 3.8% in 2019.”
“However, activity in the housing market has remained strong. Mortgage approvals for home purchases rose to 91,500 in September, the highest level since 2007.”
He added: “The outlook remains highly uncertain and will largely depend on how the pandemic evolves and the measures to contain it, as well as the effectiveness of the policy measures implemented to limit the damage to the economy in general.”
“COVID-19 changes can support housing market activity, while the stamp duty holiday will continue to provide a short-term boost by bringing purchases forward.”
“However, activity is likely to slow down in the coming quarters, perhaps drastically, if the labor market weakens as most analysts expect, especially after the stamp duty holiday expires in late March.”
“The stamp duty holiday has accelerated sales in an unprecedented way.”
Jeremy Leaf, North London real estate agent and former RICS Residential Chairman, said: “The dynamics of the housing market have changed in recent weeks since pandemic restrictions tightened. On the ground, we see fewer visits, offers, and longer transition times as lenders and transmitters struggle with accumulation.”
“However, we have not yet experienced a generalized renegotiation of prices or withdrawals from previously agreed agreements. That frenzied buying and selling of late summer have been replaced by activity at a pace we might have otherwise expected at this time of year.”
“These strong figures from Nationwide demonstrate once again that we are not just a nation of merchants, but buyers. Even the prospect of losing what for many is a relatively limited reduction in stamp duty, and of course, continued low-interest rates seem enough for now to overcome concerns about another lockdown and a worsening economic outlook. As we saw with the significant impact on restaurant trade recently of the Eat Out to Help Out Scheme.”
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