UK Oct house prices climb most since 2016, ahead of new lockdown

London

UK house prices climbed the most since 2016 last month, pushing average values to a record ahead of the renewed restrictions to contain the coronavirus.

Average house prices rose 7.5 per cent in October from the year before to a record average of £250,457 (S$443,000), mortgage lender Halifax said on Friday. On the month alone, prices gained 0.3 per cent.

The property market has defied a general economic downturn since the virus hit, as city dwellers looked to move out of urban centres. The government is also fuelling demand with a temporary tax break on purchases and by promising more generous loans for young buyers.

Under the new lockdown that took effect this week, house viewings are still allowed and real estate agents remain open for business.

The boom may be short-lived. Rising unemployment and a new lockdown this month will make it harder for transactions to go through. The Bank of England expanded monetary stimulus on Thursday as it lowered forecasts for growth.

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"While government support measures have undoubtedly helped to delay the expected downturn in the housing market, they will not continue indefinitely," said Russell Galley, managing director at Halifax. "With a number of clear headwinds facing the housing market, we expect to see greater downward pressure on house prices as we move into 2021." BLOOMBERG