House prices have increased by 5% in the year to September 2020, according to Nationwide’s House Price Index.
This increase represents the greatest annual rise since September 2016.
On a monthly basis, house prices rose by 0.9%, seasonally adjusted, this represents a decline on August, where prices increased by 2% month-on-month.
House prices set to rise by 14%
The average house price in September stood at £226,129, up from £224,123 recorded in August.
Robert Gardner, chief economist at Nationwide, said: “Housing market activity has recovered strongly in recent months.
“Mortgage approvals for house purchase rose from 66,000 in July to almost 85,000 in August – the highest since 2007, well above the monthly average of 66,000 prevailing in 2019.
“The rebound reflects a number of factors. Pent-up demand is coming through, with decisions taken to move before lockdown now progressing.
“The stamp duty holiday is adding to momentum by bringing purchases forward. Behavioural shifts may also be boosting activity as people reassess their housing needs and preferences as a result of life in lockdown.
“Our recent market research indicates that, of the people that had been considering a move before the pandemic, 19% have put their plans on hold, with over a quarter, 27%, of these citing concerns about the property market.
“Younger people were much more likely to have put off plans than older people, which may reflect concerns about employment prospects.”
Tomer Aboody, director of MT Finance, added: “As we have heard anecdotally, suburban areas are becoming increasingly popular with families looking to upsize and more importantly, find a better balance and quality of life, with greener spaces and the ability to commute to the cities when required.
“The stamp duty relief in these areas is also helping, since prices are still relatively affordable, allowing those families to get more for their money.
“Surprisingly, London has also performed strongly with good growth in values in September, as sellers take advantage of the mini boom before the possible slide which is expected once the furlough scheme comes to an end.
“We still wait to see how the economy fares in 2021, but we have to assume some downwards trend in the market. Hopefully it will not be too steep, with the government still supplying and injecting stimulus via stamp duty relief and also some salary payments.”