UK house prices climb to record high as tax cut stokes market

London

UK HOUSE prices rose to a record high last month as a government incentive to buy and a desire to move out of big cities boosted demand.

Prices rose 6 per cent from a year earlier in December to an average £253,374 (S$456,134), mortgage lender Halifax said on Friday. On the month alone, they gained 0.2 per cent.

The property boom is being fuelled by a tax cut on transactions worth as much as £15,000 to buyers.

The Covid-19 pandemic is also boosting interest in moving to larger properties and those outside of city centres as remote working becomes increasingly common.

The number of Britons working from home will rise five-fold in by 2025, according to a separate survey of chief financial officers published by Deloitte. The same poll found that 98 per cent of the 90 finance bosses expect corporate and individual tax to rise. The monthly gain showed the housing market may be starting to lose some momentum.

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Halifax predicts prices could slump as much 5 per cent in 2021 as the property transaction tax break expires in March and new restrictions to stem the spread of the virus weigh on the economy. BLOOMBERG