Housing prices climb 10% in a “buoyant” real estate market

House prices rose 10% on the year through November, which calmed speculation that the market was heading for a slowdown at the end of the year.

According to the latest data from the Nationwide mortgage lender, house prices have risen 15% since the pandemic began in March 2020.

And just last month, prices climbed 0.9%, up from 0.7% in October. In fact, annual price growth also declined slightly in October when prices increased by 9.9% over the year.

However, the 10% increase in the year through November shows that prices are back on their upward path after a “blip” in October created by the stamp duty holiday deadline. .

Robert Gardner, Nationwide’s chief economist, explained: “There have been signs of slowing down in real estate market activity in recent months. For example, the number of real estate transactions fell by almost 30% year on year in October.

“But it was almost inevitable, given the expiration of the stamp duty holiday in late September, which gave buyers a strong incentive to advance their purchase to avoid an additional tax.

“Indeed, activity has been extremely dynamic in 2021. The number of real estate transactions so far this year has already exceeded the number recorded in 2020 with two months still to go and is in fact approaching the number observed at the same step in 2007, before the global financial crisis hit (see chart attached).

Other indicators of a strong market are also in place, including a high number of mortgage approvals and good employment levels.

Robert said: “If this is maintained, housing market conditions could remain quite dynamic over the next few months, especially since the market is dynamic and it is possible that changes taking place in preferences in the future. housing, following the pandemic, continue to support activity. . “

Despite this, the long-term outlook is more uncertain, he said, especially with the emergence of the Omicron variant.

Low supply of houses for sale

Nicky Stevenson, general manager of national real estate agent Fine & Country, said one of the factors influencing prices was the lack of supply of properties for sale.

She said: “Home prices remain stubbornly high despite the start of easing in transaction levels after activity soared to a record earlier this year.

“An insufficient supply of housing stock has been insufficient to cope with the rush for larger homes with more outdoor space, and it is still too early to predict whether the new strain of Covid will hold back price growth in the market. ‘to come up.

“While there is certainly no evidence that we are about to step up a gear, we could experience a double-digit growth slowdown in the coming months.

“For now, the market remains buoyant and prices continue to soar.”

Penny D. Jackson