Annual house price growth hits 5-year hit but activity set to slow - Nationwide
By Michele Maatouk
Date: Friday 30 Oct 2020
(Sharecast News) - Annual house price growth in the UK hit a five-year high in October but activity looks set to slow, according to a survey released by Nationwide on Friday.
Annual house price growth came in at 5.8%, up from 5.0% in September and reaching its highest level since January 2015, with the stamp duty cut lending a hand. In July, Chancellor Rishi Sunak lifted the threshold at which buyers start to pay stamp duty from £125,000 to £500,000.
On the month, house prices rose 0.8% in October, down from 0.9% growth the month before.
Nationwide's chief economist, Robert Gardner, said that data suggests the economic recovery has lost momentum in recent months, while labour market conditions have also weakened, with the unemployment rate rising to 4.5% in the three months to August compared to an average of 3.8% in 2019.
"The outlook remains highly uncertain and will depend heavily on how the pandemic and the measures to contain it evolve as well as the efficacy of policy measures implemented to limit the damage to the wider economy," he said. "Behavioural shifts as a result of Covid-19 may provide support for housing market activity, while the stamp duty holiday will continue to provide a near term boost by bringing purchases forward.
"However, activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March."
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