House prices rose at the fastest pace in the past six years last month as the market accelerated to meet the stamp duty deadline.
The average house price rose 6.5 percent in the year to November to £ 229,721 in the year to November, according to Nationwide, adding nearly £ 14,000 to the cost of a typical property.
On a monthly basis, house prices rose by £ 1,895, or 0.9 percent in November, while property inflation continued to rise despite early lockdown forecasts that property values would decline this year.
And Britain’s largest construction company said the desire to move to the land was driving up bumper prices in some locations. Houses in national parks now have an average premium of £ 45,000 – or 20 percent more – compared to those outside the areas, it claimed.
Premium Real Estate: Homes in or near the New Forest can come at a hefty price tag
Costly: The average price of a house in the UK is now £ 229,721 after an increase this year
The unexpected rise in house prices this year has sparked grave concern about deterioration in affordability, especially as first-time buyers are hit by a mortgage crisis, which has forced nine out of ten of available 10 percent down payments since March.
In popular rural areas, this can be exacerbated by the fact that owning a second home pushes prices even further out of reach for the locals. In some of the most requested locations, the effect of the national park is even more pronounced, according to the national data.
A home in the New Forest can claim a whopping £ 95,000 in cash premium, while a home in the South Downs can easily fetch a premium of £ 75,000 at this point.
These additional costs are higher than the 19 percent premium recorded last year, and Nationwide said the full impact of the pandemic had not been fully absorbed.
Nearly 30 percent of people considering relocating did so because they wanted a garden or to be near parks and other outdoor spaces in the aftermath of the pandemic, while a quarter were looking to get away from the hustle and bustle of city life.
Homes within 5 km of a national park are also more expensive and require a 6 percent premium.
National park property charges an average premium of £ 45,000, Nationwide says
A house in the New Forest can charge a premium of £ 95,000 while in Snowdonia the extra average cost is £ 31,000
The New Forest is the most expensive national park to live in, averaging £ 475,000 in villages such as Ashurst, Lyndhurst and Brockenhurst.
The South Downs, which includes a number of Hampshire and Sussex towns such as Petersfield and Midhurst, is also popular with buyers looking to escape the rat race, with an average home price of £ 368,000, and has the highest population of any of the national parks. at 117,900.
Andrew Harvey, senior economist at Nationwide, said: “Those living in the parks can get the most of the great outdoors with a range of activities on their doorstep.
‘Development is also being controlled, with limited new construction, which also explains why prices are relatively high.’
With an ever-increasing number of people looking to escape city life, the real estate market performed strongly again last month.
Robert Gardner, Nationwide’s chief economist, said: “Housing market activity has remained robust. In October, real estate transactions rose to 105,600, the highest level since 2016. ‘
The nation is on a massive rethink of where to live after two lockdowns
Simon Gammon, Knight Frank Finance
He added, “Behavioral changes due to Covid-19 may support housing activity, while the stamp duty holiday will continue to boost short-term momentum by pushing purchases forward.”
Data from the Bank of England on Monday showed that last month’s mortgage approvals were the highest in more than 13 years.
Simon Gammon, managing partner at Knight Frank Finance, said, “The country is in a massive rethink of where to live after two lockdowns while interest rates are ultra-low.”
Shifts: Annual and monthly shifts in home prices, according to the latest Nationwide figures
But are there any problems on the horizon?
While the real estate market continues to do well for now, Nationwide admitted that house prices could fall ‘sharply’ in the coming quarters if further massive job cuts were to come and, as expected, the stamp duty holiday will end on March 31.
The housing market is likely to come under ‘increasing short-term pressure’ as the economy is impacted by persistent constraints following the end of the UK lockdown on December 2, while unemployment could still rise significantly, Howard Archer, chief economist at the EY Item Club, said.
He added, “There is probably also a decrease in pent-up demand.”
Pent-up demand is also likely to decline
Howard Archer, chief economist at the EY Item Club
Throughout Britain, unemployment is expected to rise to 7.5 percent next year, from the current figure of 4.8 percent. T.
That would mean that 2.6 million people would be out of work by the middle of the year, after their leave ends and companies struggling to survive or retain staff.
Nationwide chief economist Mr. Gardner said the outlook for the real estate market remains very uncertain against the backdrop of the Covid-19 pandemic.
He added: “Housing market activity is likely to slow, perhaps sharply, in the coming quarters as the labor market weakens, as most analysts expect, especially as the stamp duty holiday ends at the end of March.”
Nationwide’s positive numbers contrast with a report from Halifax yesterday, showing that consumer confidence in the housing market had contracted last month.
Only 14 percent of people polled by Halifax said they believed their home had become more valuable in November, compared to 17 percent in September and October.
Despite the slip, the figure remained well above the 4 percent recorded during the first national lockdown in May.
Commenting on the latest figures from Nationwide, North London real estate agent Jeremy Leaf and former RICS housing chairman said: “ These numbers feel like the storm before calm as buyers and sellers rushed to take advantage of the stamp duty holiday before the March, despite ongoing Covid restrictions in October, the possibility of a no-deal Brexit and the weakening of economic growth.
That frenzy has since been replaced by a quieter, but just as determined mood to complete the previously agreed sales.
“We also see no signs of significant price adjustment, regardless of whether there is an extension of the stamp duty holiday, with the activity supported by a shortage of advertising and low interest rates in the longer term.”
Some of the links in this article may be affiliate links. If you click on it, we can earn a small commission. That helps us fund This Is Money and use it for free. We do not write articles to promote products. We do not allow commercial relationships to affect our editorial independence.