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House prices increased by 2 per cent in September, according to the latest Nationwide index. This pushed up the annual rate of house price growth to 5.0 per cent, the highest rate since Sep 2016
Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:
‘Housing market activity has recovered strongly in recent months’, said Nationwide chief economist Robert Gardner. ‘Mortgage approvals for house purchase rose from around 66,000 in July to almost 85,000 in August – the highest since 2007, well above the monthly average of 66,000 prevailing in 2019.
‘The rebound reflects a number of factors. Pent-up demand is coming through, with decisions taken to move before lockdown now progressing. The stamp duty holiday is adding to momentum by bringing purchases forward. Behavioural shifts may also be boosting activity as people reassess their housing needs and preferences as a result of life in lockdown’.
Nationwide said its recent research indicated that, of the people who had been considering a move before the Coronavirus Crisis, a fifth had put their plans on hold – a quarter of these saying they had concerns about the property market.
‘Younger people were much more likely to have put off plans than older people, which may reflect concerns about employment prospects’, said Gardner.
‘Indeed, most forecasters expect labour market conditions to weaken significantly in the quarters ahead as tighter restrictions dampen economic activity and the furlough scheme winds down. While the recently announced jobs support scheme will provide some assistance, it is not as comprehensive as the furlough scheme it replaces’.
Of those moving or considering a move, around a third were looking to move to a different area, while nearly 30 per cent were doing so to access a garden or outdoor space more easily.
‘As you might expect, the majority of people are looking to move to less urban areas, with this trend becoming increasingly evident among older age cohorts’, said Gardner.