Annual house price growth remained ‘strong’ in November, the Nationwide’s latest house price index suggests.
At 10.0 per cent it was marginally higher than the 9.9 per cent recorded in October, but prices still increased by just short of 1 per cent on the month, according to the mortgage lender.
‘As a result, house prices are now almost 15 per cent above the level prevailing in March last year when the pandemic struck the UK’, said Nationwide chief economist Robert Gardner.
‘There have been some signs of cooling in housing market activity in recent months. For example, the number of housing transactions were down almost 30 per cent year-on-year in October. But this was almost inevitable, given the expiry of the Stamp Duty holiday at the end of September, which gave buyers a strong incentive to bring forward their purchase to avoid additional tax.
‘Indeed, activity has been extremely buoyant in 2021. The number of housing transactions so far this year has already exceeded the number recorded in 2020 with two months still to go and is actually tracking close to the number seen at the same stage in 2007, before the global financial crisis struck.
‘Moreover, underlying activity appears to be holding up well. The number of mortgages approved for house purchases in October was still running above the 2019 monthly average. Early indications also suggest that labour market conditions remain robust, despite the furlough scheme finishing at the end of September. If this is maintained, housing market conditions may remain fairly buoyant in the coming months, especially since the market has momentum and there is scope for ongoing shifts in housing preferences, as a result of the pandemic, to continue to support activity’.
Even so, Gardner said the ‘outlook remains uncertain’ especially in view of the emergence of the new Coronavirus variant Omicron.
‘While consumer confidence stabilised in November, sentiment remains well below the levels seen during the summer, partly as a result of a sharp increase in the cost of living. Moreover, inflation is set to rise further, probably towards 5 per cent in the coming quarters’.
• Rightmove has predicted house prices will rise by 5 per cent next year. ‘We’re still seeing a huge number of home-hunters looking to move, and not enough homes available to buy, so the imbalance continues to push prices up’. The 2022 property market will continue to be busy, but the property portal predicts it will be ‘less frenzied than 2021’.
According to Rightmove, the four most sought-after regions are currently Scotland, the West Midlands, the South West and Yorkshire and the Humber. ‘We predict these areas are likely to see a higher rate of 7 per cent price growth next year’.
