Home prices in UK rise most in 6 years

London

BRITISH house prices rose faster than expected in December, to record their biggest annual increase in six years, as tax incentives and Covid-driven appetite for larger homes continued to boost demand, mortgage lender Nationwide said.

House prices rose by 0.8 per cent in December alone, barely slowing from the 0.9 per cent recorded in November, and were 7.3 per cent higher than a year earlier.

After a collapse in house purchases during the first few months of lockdown, there has been a surge in demand to move house, driven in part by a temporary exemption of property purchase taxes which will expire at the end of March.

Nationwide said the strength of the housing market contrasted with weakness in some other parts of the economy, and said the outlook for prices in 2021 was highly uncertain.

"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," Nationwide economist Robert Gardner said.

Demand for detached homes had risen most, with an average rise of just over 8 per cent in the past 12 months, while prices for flats had risen by 4 per cent. REUTERS