End of 2020 saw house prices at record high, Halifax House Price Index shows

The latest Halifax House Price Index has been released, showing data from December. The key findings of the report highlight:

• On a monthly basis, house prices in December were 0.2% higher than in November
• In the latest quarter (October to December) house prices were 2.6% higher than in the preceding three months (July to September)
• House prices in December were 6.0% higher than in the same month a year earlier

Read the full report here: www.halifax.co.uk/assets/pdf/december-2020-house-price-index.pdf.

Lucy Pendleton, property expert at independent estate agent James Pendleton, comments: “This market seems to be able to hurdle anything and, though the annual growth rate has cooled slightly, it still continues to plough a low-Earth orbit.

“It must be beginning to dawn on the Chancellor that the stamp duty tax break was completely unnecessary. Any sensible estate agent is hoping the market puts on the brakes before we end up in bubble territory. A housing market has to take the economy with it ultimately, and the threat to the labour market in the second quarter of this year is a major concern.

“The simple truth is that extra space has become non-negotiable for legions of homeowners with families, and the usual winter slowdown has met the immovable force that is hundreds of thousands of people all trying to jump to larger properties at the same time.

“It’s right about now that vendors begin to think of their homes as piggy banks once again, even if agents on the ground are seeing more homes fall short of asking prices. This only leads to tears later on when the chasing pack forces valuations back to a more sensible level, and there are indications in London that this is already beginning to happen.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, comments: “Buyers forced to re-evaluate their living arrangements have delivered a market with endless momentum that now threatens to course right through to the spring. It’s very unusual to reach a record high in December, when buyers usually use the winter to pause their house hunting.

“This time around, buyers have remained steadfast and this underlines the fact that the race for more space is no passing fashion. It looks set to be a seismic shift in priorities that could last a generation and a third national lockdown is only going to solidify that trend.

“People have long memories when it comes to the traumas inflicted in situations like this. Room to spread out is now putting other so-called essentials in the shade and forcing compromises over things that would once have been deemed priorities like en-suites and out-buildings.

“This is forcing buyers to focus on a much longer time horizon that allows them to mentally set aside headaches like Brexit, the pandemic, and the end of government support measures.

“The more time passes, the more apparent it becomes that the desire for a larger home is trumping the stamp duty tax break in buyers’ eyes, as it becomes increasingly unlikely that transactions will complete in time to benefit.”