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Average UK house price hits record high with unprecedented demand

The average UK house price recently rose over £250k for the first time. The housing market continues to face a mini-boom with a significant rise in buying and selling.

Over the past few months, the housing market has gained steam with a surge of activity. This has led the average UK house price to hit £250,456, a new record high, according to the recent house price update from Halifax.

The latest quarter, from August to October, saw house prices rise 4% higher than the preceding quarter. Additionally, the average UK house price increased by 7.5% in October 2020 compared to the same month in 2019. This rise features the strongest growth since June 2016.

Russell Galley, Halifax managing director, comments: “This level of price inflation is underpinned by unusually high levels of demand, with latest industry figures showing home-buyer mortgage approvals at their highest level since 2007, as transaction levels continue to be supercharged by pent-up demand as a result of the spring/summer lockdown, as well as the Chancellor’s waiver on stamp duty for properties up to £500,000.”

The housing market remains strong

Even with England partway through a second lockdown, house moves are continuing swiftly. The significant amount of activity in the buying and renting spaces indicates many have been especially keen to move.

The latest market report from the Royal Institute for Chartered Surveyors (RICS) showed the UK housing market performed even stronger than predicted in October. Additionally, a report from TwentyCi revealed transaction levels are currently the strongest they’ve been in over a decade. This further illustrates how the housing market is continuing to show strength and resilience.

The stamp duty holiday, which is currently in place until 31st March, has also been driving demand. Many prospective buyers have an eye on beating that deadline, in order to take advantage of significant savings. Until the March deadline, buyers only pay stamp duty above the £500,000 threshold on sales, and for second homes and investments, the 3% surcharge is only payable.

Mortgage product numbers, which fell sharply in March, have also risen recently. This provides buyers with more mortgage options. Even though interest rates are rising, homebuyers still have time to secure the best deals if they act quickly.

Property sales continue at record levels

With many people spending more time at home and the increase in working from home, priorities are changing for what people want from their homes. And this second lockdown is expected to further secure people’s desire to move. Having high speed internet connectivity, a home office or more space are at the top of many buyer’s agendas.

Galley says: “Overall we saw a broad continuation of recent trends with the market still predominantly being driven by home-mover demand for larger houses. Since March flat prices are up by 2.0% compared to a 6.0% increase for a typical detached property. In cash terms that equates to a £2,883 increase for flats compared to a £27,371 rise for detached houses.”

With the unprecedented demand for people to move house, property prices are likely to remain strong throughout the coming months as property sales remain at record levels.

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