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House prices rise by 10pc in ‘extremely buoyant’ year

By Paul Drury

HOUSE prices have risen by 10 per cent in the last year – with the number of sales reaching levels close to those seen before the 2007-8 financial crash.

In its monthly report into UK house prices, Nationwide said the average house had gone up in value by £252,687 in November compared to October, when sales traditionally begin to wind down for Christmas.

This meant house prices were 15 per cent higher than in March 2020, at the start of the pandemic. However, the bank’s chief economist said Omicron could dent confidence. Robert Gardner said: ‘The outlook remains uncertain, where a number of factors suggest the pace of activity may slow.

‘It is unclear what impact Omicron will have on the wider economy. While consumer confidence stabilised in November, sentiment remains well below levels seen in summer, partly as a result of a sharp increase in the cost of living.’

Once seasonal effects were taken into consideration, the bank found house prices had increased 0.9 per cent on the October figure, which itself proved to be strong.

However, the total number of transactions was down almost 30 per cent compared to October 2020. The bank considered this to be ‘almost inevitable’, given the September cut-off date for prospective buyers south of the Border who wanted to take advantage of the stamp duty holiday. However, property market performance this year has already outstripped that of 2020 with two months still to spare.

Mr Gardner added: ‘Activity has been extremely buoyant in 2021. The number of housing transactions so far this year... is actually tracking close to the number seen at the same stage in 2007, before the global financial crisis struck.

‘Early indications also suggest labour market conditions remain robust, despite the furlough scheme finishing. If this is maintained, housing market conditions may remain fairly buoyant in the coming months.’ However, a note of caution was sounded over the ‘cooling influence’ rising interest rates may have if, as expected, they are implemented in the new year.

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