Fears of an imminent halt to property price acceleration across the UK have been temporarily allayed after one of the country’s biggest lenders once again reported strong monthly growth.
According to the latest figures from Nationwide, average UK house prices for September saw an impressive 5% spike compared to the same month in 2019. The growth that suggests post-lockdown demand is continuing to fuel the UK property market’s impressive recent performance
Property purchase restrictions were eased
The removal of restrictions on property viewings in most parts of the UK has been credited with the stronger and ongoing recovery of the housing market.
Data published in Nationwide’s recent report suggests that not only were average property prices up an additional 0.9% in September from the previous month but that the annual rate of growth is now the highest it has been since 2016.
On a quarterly basis, average property prices were up approximately 1.7% in the three months ending September 30. At this point, the average asking price for a home in the UK stood at £226,129.
The report from Nationwide also suggested that house prices were up in most UK regions, rather than being confined specifically to the usual key areas.
“The rebound reflects a number of factors. Pent-up demand is coming through, with decisions taken to move before lockdown now progressing,” commented Robert Gardner, Nationwide’s chief economist.
Mr. Gardner also highlighted how the chancellor’s temporary holiday on stamp duty payments was continuing to drive property purchase decisions in England and Northern Ireland. Until the end of March next year, purchases of properties valued at £500,000 or less will not incur any stamp duty payments.
“Behavioural shifts may also be boosting activity as people reassess their housing needs and preferences as a result of life in lockdown,” Mr. Gardner added.
Uncertain long-term projections
While the picture is predominantly positive for the time being, economists are unwilling to rule out more turbulent times ahead for the housing market. Nationwide and several other major lenders have indicated expectations of long-term coronavirus-related implications, which may not become fully apparent for some time.
One of which is job fears among younger workers and professionals in particular, who, due to the risk of redundancy or reduced working hours, are putting home purchase plans on hold.
Government wage support is also becoming less prolific, causing many to rethink major purchase decisions in general.
The vast majority of economists and real estate experts agree that the recent record-breaking property price performance cannot last forever. Though, in most instances, I admit to being pleasantly surprised by the speed at which the market has returned to strength.