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House price growth hits highest level since 2015 – Nationwide

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  • 01/12/2020
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House price growth hits highest level since 2015 – Nationwide
House prices jumped 6.5 per cent annually in November, the highest growth seen since January 2015, as measured by Nationwide.

 

Values shot up 0.9 per cent month-on-month, taking the average price to £229, 721.

The buoyant market, however, is somewhat out of kilter with the wider economy, experts have warned.

Robert Gardner, Nationwide’s chief economist, said: “Economic growth slowed sharply from 6.3 per cent in the month of July to 2.2 per cent in August and 1.1 per cent in September, even though the economy was still around eight per cent smaller than its pre-pandemic level at that point.

“Rising infection rates and tighter social restrictions will have resulted in a further hit to growth in October and November.”

As a result, the forecast for the coming months is unclear, according to Gardner.

He added: “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, 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.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, made the ominous comparison between today’s market and 2007.

He said: “The last time the market was buzzing like this was back in 2007 before the credit crunch.

“But this time around there is far more scrutiny on mortgage underwriting and the assessment of affordability. This, combined with historic low interest rates, mean we should not see a repeat of that crisis, despite the continued flurry of activity.

“There has been some good news for mortgage borrowers in recent days as 90 per cent loan-to-value mortgages become more readily available.

“This should help bring down rates on high LTVs, making those deals more accessible, and further boosting the market, at least in the short term.”

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