Surging activity has seen house prices rise by 6.5% in November, the highest rate of growth since January 2015, Nationwide’s House Price Index has revealed.
This represents a rise from 5.8% in October.
On a monthly basis prices have risen by 0.9% to £229,721 in November, a faster increase than the month before (0.8%).
Miles Robinson, head of mortgages at online mortgage broker Trussle, said: “This growth has likely been driven by demand from buyers eager to take advantage of the stamp duty holiday, which is an attractive incentive to buy a new home during what has been a challenging period for many.
“Although the holiday is in place until 31st March 2021, unfortunately for many, it might be too late to benefit from the tax relief, with processing delays due to the unprecedented level of demand. While the outlook is still uncertain, the next few months could mark a turning point and we may see the high number of transactions begin to fall.”
Despite the house price increase, Robert Gardner, chief economist at Nationwide, was cautious about the state of the market.
He said: “Economic growth slowed sharply from 6.3% in the month of July to 2.2% in August and 1.1% in September, even though the economy was still around 8% smaller than its prepandemic level at that point.
“Rising infection rates and tighter social restrictions will have resulted in a further hit to growth in October and November.
“Labour market conditions also weakened with the unemployment rate rising to 4.8% in the three months to September – still low by historic standards, but up from an average of 3.8% in 2019.
“The extension of the furlough scheme to March 2021 will help limit job losses in the short term by enabling firms to retain more staff that they would have done otherwise.”
He added: “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.”