House prices are rising by 5% a year at the moment, the fastest rate since 2016 and up from 3.7% in August, the latest Nationwide index reveals.
The building society says the current boom is down to several ‘pent up demand’ factors but that the most significant is home movers bringing forward their plans before a second lockdown.
“Our recent house prices market research indicates that, of the people that had been considering a move before the pandemic, 19% have put their plans on hold, with over a quarter of these citing concerns about the property market,” says Robert Gardner, Nationwide’s Chief Economist.
But he says 10% of those home movers Nationwide surveyed were rushing to move before a potential second lockdown with a further 18% saying they were considering it.
The additional boom caused by this is continuing across the UK with all regions seeing rises including the SW where they’re up by 5.5% year-on-year.
David Westgate (left), Group CEO of Andrews, says: “5% annual growth is an impressive headline figure but the post-lockdown property market resurgence has now peaked.
“Despite the stamp duty holiday, there are signs that the market is now slowly cooling with tighter lending and first time buyers being squeezed out.
“There is a significant pipeline of property transactions now tied up and in solicitors’ hands, all waiting to complete before the end of the year to avoid increased stamp duty charges.
“The good news is that the slowing of the market, triggered by tighter lending, means that we are unlikely to see a cliff edge drop at the end of March when the stamp duty holiday ends, creating another boom and bust scenario.”
Lucy Pendleton of London agency James Pendleton, says 5% growth will be the peak but that “there will be no collapse”.