Nationwide’s most recent House Price Index revealed that house price growth in October 2020 was at the highest levels since January 2015, which commentators have in part attributed to a rush to take advantage of the stamp duty holiday before it closes in March 2021.

Shaun Church, director at Private Finance, said: “Price rises have been in part triggered by a combination of buyers rushing to lock in historic low interest rates to finance home purchases and take advantage of the higher stamp duty threshold.

“Smaller debt repayments sourced from more favourable loan terms and savings from reduced tax payments is providing enough incentive to push on-the-fence buyers to progress purchases.”

Nationwide: October annual house price growth highest since 2015

However, Church warned that buyers must act quickly to take advantage of the savings, and might be hindered by delays and extended completion times among lenders struggling with the sharp rise in demand.

Church added that the picture was not necessarily positive looking past the close of the stamp duty holiday scheme.

He said: “The UK’s worsening economic outlook, in part the result of renewed restrictions on economic activity, is increasing the risk of defaults.

“This may result in lenders tightening their credit controls beyond the high loan-to-value segment of the market, which would curb activity in the housing market.

“Downward pressure on activity may also be curtailed by potential buyers putting off purchases in response to mounting fears over employment prospects.”

Although the reintroduction of some lockdown restrictions as the country faces a second wave might post problems for the housing market, Jeremy Leaf, North London estate agent and a former RICS residential chairman, said: “On the ground, we’re seeing fewer viewings, offers and longer transition times as lenders and conveyancers struggle with the backlog.

“However, we haven’t yet experienced widespread price renegotiation or withdrawals from previously-agreed deals.

“That feverish buying and selling of late summer has been replaced by activity at a pace we might have otherwise expected at this time of year.”

He adds that the Nationwide figures show that the benefit of stamp duty savings evidently outweigh concerns about another lockdown and a worsening economic outlook.

Leaf said: “Looking forward, we don’t expect huge change until it is almost impossible to take advantage of the concession, unless of course the scheme is extended or replaced with further help for first-time buyers, such as the promised government-backed higher loan-to-value [LTV] mortgages.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “With mortgage approvals rising to 91,500 in September, the highest level since 2007, it is no surprise that property prices continue to rise on the back of higher demand.

“However, while prices are still rising, there are some concerns for the outlook with evidence that the economic recovery and labour market conditions are looking less rosy.”

He noted that the stamp duty deadline is a concern that should be looked at more closely by the government, and added that service levels and lenders’ capacity to deal with rising demand might also post problems for the market.

Anna Clare Harper, CEO of asset manager SPI Capital, said that, in addition to reflecting the impact of factors such as the stamp duty holiday and pent up demand: “House price growth also reflects uncertainty and lack of alternatives. If you are getting low or no returns with other investments, you are more likely to choose the tangibility and security that comes with putting money into bricks and mortar.”

Tomer Aboody, director of MT Finance, said that despite bleak predictions earlier in the year, the data shows that the 2020 property market performance has been a strong one.

He said: “The monthly increase in prices shows phenomenal growth, which is down to confidence which consumers are feeling, generated by the low interest rate environment and the stamp duty holiday.

“With further pending lockdowns and working environment changes for the foreseeable future, families are looking to purchase bigger homes, allowing them more flexibility and home comforts.

“A boost to the final quarter figures, along with the Boris bounce we saw in the first quarter of the year, will mean this turns out to be a far better year for the market than any of us could previously have hoped. What happens next year remains to be seen.”

Guy Harrington, CEO of residential lender Glenhawk, warned that the future may not be as bright as these figures might imply.

He said: “Whilst the UK teeters on the brink of a nationwide lockdown, the housing market continues to defy conventional wisdom, as pent up demand is exacerbated by buyers rushing to beat the stamp duty holiday deadline.

“The warning lights are well and truly flashing however, with grim unemployment data, the stock market in free fall and mortgage providers tightening their lending criteria.

“If and when the market corrects is anyone’s guess, but the government must hope that the predictions for a deep recession don’t materialise, otherwise the inevitable collapse in sales volumes will quickly unwind this recovery.”

Steve Seal, managing director at Bluestone Mortgages, said: “House prices continued to surge this month, with the temporary cut to stamp duty fuelling consumer demand.

“Lenders and advisers have been working together to ensure that prospective buyers can secure the lending they need amid the ongoing crisis – something which is contributing positively to the recovery of the market.

“However, while the housing market continues to recover from the impacts of the pandemic, it is likely that many customers – particularly those who face further financial hardship beyond October – will require additional support from lenders over the coming months. For these borrowers, this has the potential to impact their credit score and, subsequently, their ability to secure a mainstream mortgage in the future.

“This is why the specialist lending market will be essential for supporting underserved customers over the long term, providing them with financial solutions to cater for their specific needs.

“Moving forward, specialist lenders should begin preparing for this new reality, ensuring that they are geared up to serve growing demand from non-vanilla borrowers in the future.”