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Blog October 12, 2020

Annual house price growth rises to record levels

Annual house price growth rose by five per cent in September, representing the greatest year-on-year rise since 2016, it has been revealed.

The figures form part of the Nationwide House Price Index, the monthly tracker which records property values across the country.

According to the report, house prices increased by 0.9 per cent in September, following a two per cent rise in August, while annual house prices grew five per cent over the year to September – up from 3.7 per cent the year before and the highest on record since September 2016.

Commenting on the statistics, Nationwide's Chief Economist, Robert Gardner, said the housing market has benefited from a boost in activity over the last three months, majorly due to the launch of the Stamp Duty Holiday.

The figures show that mortgage approvals for house purchases rose from 66,000 in July to nearly 85,000 in August – the highest on record since 2007 and “well above” the monthly average.

“The rebound reflects a number of factors. Pent-up demand is coming through, with decisions taken to move before lockdown now progressing,” said Mr Gardner. “The stamp duty holiday is adding to momentum by bringing purchases forward. Behavioural shifts may also be boosting activity as people reassess their housing needs and preferences as a result of life in lockdown.”

In fact, just 19 per cent of people surveyed said their plans to move had been scuppered by the pandemic. This increases to 25 per cent among young people – the demographic most likely to have been affected by unemployment and job uncertainty.

This is compared to one in 10 respondents who say that the pandemic “spurred them to move”.

About a third considering or moving home, meanwhile, were doing so to access a garden or outdoor space more easily.

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