Chris Sykes, mortgage broker at Private Finance comments on ONS’ UK House Price Index for October 2020 (released 16/12/20)
“These latest figures from the ONS show that UK average house prices increased by 5.4% over the year to October 2020, up from 4.3% in September, reaching a record high of £245,000 – the highest annual growth rate the UK has seen since October 20161. This highlights the extent to which the housing market has dramatically contradicted and outperformed expectations in 2020. These figures come after other recent statistics, also from the ONS (14th Dec 2020), highlight that redundancies have reached record highs of 370,000 in the third quarter of the year and the unemployment rate sits at 4.9% – more evidence that the unique circumstances of the year have led to the housing market being detached from the economic reality. Moreover, it remains important to remember that as with any economic shock, existing inequalities are amplified, and the housing and mortgage market is indicative of this amplification, with borrowers with large amounts of cash for a deposit or large amounts of equity benefitting from historically low interest rates as well as saving money through the SDLT holiday – to those who have, more shall be given…
This growth in house prices has led to renewed confidence in the housing market and lenders are now returning to offering riskier propositions, including lending at higher LTVs, a section of the market that was effectively extinct until quite recently.
These figures clearly indicate a period of unprecedented levels of demand and sales, however, the question remains as to for how long the market can keep flying in the face of the economic facts and will it be able to continue this period of growth or at least stabilise, or will we now see decline in prices in the coming months? With Brexit, further lockdowns, and the complexity of the vaccine rollout it would appear that there are still some turbulent times for the market to navigate…”
1&2Source: Office for National Statistics, UK House Price Index: December 2020, https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/october2020
To stay up to date on the latest, trends, innovations, people news and company updates within the UK property and housebuilding market please register to receive our newsletter here.
Media contact
Rebecca Morpeth Spayne,
Editor, Showhome Magazine
Tel: +44 (0) 1622 823 922
Email: editor@yourshow-home.com
