UK house prices

UK house price growth 'fastest for almost six years'

Research from the Nationwide has concluded that UK house prices are 6.5% higher than a year ago - the sharpest rise for nearly six years. 

Despite the impact of the coronavirus pandemic, the housing market has remained "robust", with the average property value now at £ 229,721, 0.9% higher in November than in October.  Despite this rapid rise, the Nationwide expect this growth to slow in 2021.

House prices have risen in many parts of the UK as homeowners sought a change in lifestyle, or more space to work from home. There was also some pent-up demand from the first period of lockdown as well as a variety of incentives such as tax breaks in certain parts of the country, or the reduction in Stamp Duty, that has caused demand - and therefore prices - to rise.

Robert Gardner, Nationwide's chief economist, said the economic fall-out from the Covid crisis would eventually be felt in the housing market.

"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. 

"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."

Many experts suggest that 2021 will see a fall in house prices, as workers return to the office, Stamp Duty tariffs return to their usual levels and mortgage rates will still be above their pre-Covid level, due to the weakened labour market.