UK house prices continue to grow in December
By Iain Gilbert
Date: Wednesday 30 Dec 2020
(Sharecast News) - Annual house price growth continued to accelerate in December, reaching a six-year high of 7.3%, according to Nationwide's house price index, up from 6.5% in the preceding month.
House prices rose by 0.8% month-on-month to £230,920, after taking account of seasonal effects, following a 0.9% rise in November, ending the year 5.3% above the level seen when the pandemic struck the UK back in March.
"The resilience seen in recent quarters seemed unlikely at the start of the pandemic. Indeed, housing market activity almost ground to a complete halt during the first lockdown as the wider economy shrank by an unprecedented 26%," said Robert Gardner, Nationwide's chief economist.
"But, since then, housing demand has been buoyed by a raft of policy measures and changing preferences in the wake of the pandemic."
Nationwide said furlough and self-employment income support schemes provided "vital support" for the labour market, while a host of measures helped to keep down the cost of borrowing and keep the supply of credit flowing as the stamp duty holiday also stimulated housing demand.
Looking forward, Nationwide stated the outlook remained "highly uncertain" and would much depend on how the pandemic and the measures to contain it evolve.
"However, housing market 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," concluded Nationwide.
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