Halifax: House prices soar 7.5% in a year to add £ 18,000 to the average home

House prices are up 7.5 percent over the past year as the mini-boom in blocked properties pushed the cost of the average home to over £ 250,000, Britain's largest mortgage lender said today.

Halifax said home inflation had reached its highest level since mid-2016 on its long-term home price index, with the average home being nearly £ 18,000 more expensive than a year ago.

However, there are signs that the momentum is slowing, with the average house price rising only 0.3 percent per month in October, compared to 1.5 percent in September.

A rush of buyers and sellers returning to the market after the reopening in May – after the freeze at the beginning of the lockdown – coupled with the stamp duty leave until next March has spurred activity.

House prices have hit new record highs despite the lockdown, but there are signs that the heat in the market is subsiding

The average home price is now £ 250,457, a new record high according to Halifax and the first time it has exceeded a quarter of a million pounds.

House prices also rose 4 percent in the last quarter than between May and July.

Low interest rates help support the market, but a mortgage crisis for buyers with smaller deposits is affecting first-time buyers and job losses are expected to slow activity and pull back house price inflation.

The Bank of England yesterday held rates at 0.1 percent and pumped an additional £ 150 billion into the financial system through quantitative easing. However, she warned that the economy would contract 2 percent in the last three months of the year as lockdown measures hampered the recovery.

Russell Galley, Halifax General Manager said, “The pace of recent price growth in the market has been driven by a 5.3 percent increase over the past four months, the fastest since 2006.

“However, month-on-month price growth slowed significantly, dropping to just 0.3 percent, compared to 1.5 percent in September.

“Overall, we've seen a broad continuation of recent trends, with the market still being mostly driven by home demand for larger houses.

House price inflation fell when the spring lockdown hit before picking up again

House price inflation fell as the spring lockdown hit before picking up again

“Flat rate prices have increased 2 percent since March, compared to a 6 percent increase for a typical freestanding property. In cash, this is an increase of £ 2,883 for homes compared to an increase of £ 27,371 for single family homes. "

However, he believes that the market may have trouble going forward as the future remains uncertain.

He added, “This price inflation is supported by unusually high demand. The latest industry figures show that homebuyer mortgage approvals are at their highest level since 2007 as transaction levels continue to be weighed down by pent-up demand, the spring / summer lockdown, as well as the Chancellor's waiver of stamp duty on property up to £ 500,000.

“While government support measures have undoubtedly helped delay the expected housing downturn, they are not going to last indefinitely and as we move through autumn and winter the macroeconomic landscape in the UK remains highly uncertain.

"Although the renewed lockdown will be less restrictive than at the beginning of this year, it shows that the country's fight with Covid-19 is far from over."

"In view of the significant headwinds on the real estate market, we expect stronger downward pressure on real estate prices in 2021."

However, some real estate experts believe that the market will return to full strength if workers are expected to return to their office.

Homes for sale have returned to pre-lockdown levels as the market has improved

Homes for sale have returned to pre-lockdown levels as the market has improved

Best mortgages

Mark Harris, managing director of mortgage broker SPF Private Clients, said: & # 39; The effects of Covid are clear as the price gap between apartments and houses has never been more pronounced. People need more outdoor space and not all apartments have roof terraces and balconies.

“But while Covid is having a massive impact, it's likely only temporary that people are unable to work from home forever four days a week.

“Employers are more likely to accept working from home, but once we get back to normal, they'll want to see more people in the office.

Top Mortgage Rates And How To Find Them With This Is Money & # 39; s Help

This is Money has partnered with L&C Mortgages, a company of independent mortgage brokers that specialize in finding the best mortgage rates and the right offer for you.

To Search For The Best Mortgage Deal And Speak To An Advisor Click Here.

Or, you can fill in your details online to find out the best mortgage rates for you.

"These apartments, 20 minutes from work, are more attractive than a house on the Dorset coast when you have to be in the office four times a week."

Jeremy Leaf, North London real estate agent and former RICS chairman of residential real estate, added, “While these numbers reflect what happened before lockdowns began and the reduction in price increases over the past month, we don't see much of a change on that Ground.

& # 39; The number of viewings and offers is fewer than two months ago, but the quality remains as the potential loss of the stamp duty concession is more of a draw for buyers than concerns about the pandemic, Brexit, and worsening economic news .

"Few offers or listings have been withdrawn, so we expect the market to continue down this path for at least the next month or two unless the stamp duty deadline is extended."

The average house price has risen nearly £ 18,000 over the past year to stand at £ 250,457

The average house price has risen nearly £ 18,000 over the past year to stand at £ 250,457

Earlier this week, Robert Jenrick, Secretary of State for Housing, confirmed that the UK property market can continue to operate with the sightings and valuations that were allowed during the November lockdown.

Tenants and homeowners can continue to move with real estate agents, construction sites, traders, and moving companies during this time even though they follow safety guidelines.

This allows home buyers in England to take advantage of the stamp duty vacation, which is scheduled to end on March 31, 2021.

For those struggling to pay their bills, the mortgage payment vacation has been extended for up to six months.

Households are encouraged to assess the financial impact of a mortgage vacation vacation on the amount they owe their lender before applying.

Some of the links in this article may be affiliate links. If you click on it, we may receive a small commission. This helps us fund This Is Money and use it for free. We do not write articles to promote products. We do not allow any business relationship that would impair our editorial independence.