Activity has been boosted as many buyers are looking to beat the stamp duty holiday deadline
House prices increased by 5.8% annually in October, marking the fastest year-on-year growth rate since January 2015, Nationwide Building Society said.
Prices increased by 0.8% month on month.
There have been signs that many buyers are currently looking to beat the stamp duty holiday deadline, which expires on March 31 2021.
Activity has also been boosted by buyers searching for homes with more space during the coronavirus crisis – and Bank of England figures released this week showed home-buyer mortgage approval numbers climbed to a 13-year high in September.
But concerns have been raised that potential buyers may simply pull out of transactions in early 2021 if it looks like they will not meet the stamp duty deadline.
NAEA (National Association of Estate Agents) Propertymark and others have been calling for action to stop a cliff-edge situation next year, which they argue could be done through an extension of the deadline and a smoothing of the end of the holiday.
Robert Gardner, Nationwide’s chief economist, said: 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, Gardner said.
Lucy Pendleton, from estate agent James Pendleton, said: The only slight change to the picture over the past couple of months is the way demand for outside space and gardens has softened. This always happens as we hit autumn, as the inclement weather adjusts buyers’ natural focus away from the stage for summer parties and barbecues to cosy interiors.
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