Average House Price Rises During November | moneyfacts.co.uk

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Derin Clark

Derin Clark

Online Reporter
Published: 01/12/2020

House prices in the UK rose by 6.5% year-on-year, the highest rate since January 2015 the latest Nationwide House Price Index reveals.

The average house price in the UK is now £229,721, an increase of 0.9% month-on-month, after taking account of seasonal factors. Although house prices have been rising for the last few months, Nationwide warns that this trend may not continue. As Robert Gardner, chief economist at Nationwide, said: “The outlook remains highly uncertain and will depend heavily on how the pandemic and the measures to contain it evolve as well as the efficacy of policy measures implemented to limit the damage to the wider economy. 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.”

Buying a property before the stamp duty holiday ends

As we reported last week , those looking to buy a property before the stamp duty reduction ends on the 31 March 2020 should act quickly, as due to a combination of increased demand and a backlog of applications, mortgage approvals and the house buying process are taking longer than usual. The good news for those looking to move home is that mortgage rates continue to remain competitively low, with the lowest rate on a two year fixed deal in the moving home chart standing at just 1.09% on a 60% loan-to-value (LTV).

According to market research carried out by Nationwide, those looking to move home are opting for properties located in the countryside, with national parks becoming increasingly popular. Gardner added: “In recent months we have highlighted how housing preferences have been shifting as a result of the pandemic. Our market research suggested that nearly 30% of those considering a move were doing so to access a garden or outdoor space more easily, with 25% looking to get away from the hustle and bustle of urban life.

“With this in mind, we revisited our previous research exploring what the impact of being located in a national park has on house prices. It is important to note that these results won’t fully reflect any changes since the pandemic, since we construct the estimates using 12 months of data.”

He continued: “Our updated research suggests a property located within a national park attracts a 20% premium over an otherwise identical property. This is around £45,000 in cash terms based on the current average UK house price (in Q3). This is slightly higher than the premium identified in our 2019 research (which was 19%).

“Moreover, the premium is not limited entirely to properties located within the boundaries of a national park. There is also evidence of a ‘fringe benefit’ for properties located close by. Properties within 5km (c.3 miles) of a national park command a 6% premium compared with those outside of this range.”

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