Property prices leapt 7.3% year-on-year last month as Britain's housing market boom continues, with lender Halifax reporting mortgage applications at a 12-year high. Figures from the bank show the average residential home sold for £249,870 ($322,877) in September, with the highest annual rise since 2016.
Commentators noted political uncertainty had weighed on prices last September, but say the market had still been extremely strong since the first national lockdown eased. Prices were up 1.6% on the previous month in a third month in a row of gains. Growth has lost less steam than expected by analysts, who had predicted monthly growth of 0.6%.
It comes in spite of the resurgent coronavirus, tighter lockdown restrictions and the ongoing economic crisis, with some experts calling the property boom a paradox. There seems to have been a fundamental shift in demand from buyers brought about by the structural effects of increased home working and a desire for more space, while the stamp duty holiday is incentivising vendors and buyers to close deals at pace before the break ends next March. Halifax had received more mortgage applications from both first-time buyers and home-movers than at any time since 2008 over the past three months. But experts warn of significant possible downward pressure on house prices in the months to come as the economic downturn eventually dampens the market.
Many believe that it is highly unlikely that the housing market will continue to remain immune to the economic impact of the pandemic. The belief is that the release of pent up demand and indeed the stamp duty holiday can only be temporary fillips and their impact will inevitably start to wane. And as employment support measures are gradually scaled back beyond the end of October, the spectre of increased unemployment over the winter may well come into sharper relief.
About the Author: Glen Callow
