The UK housing market made unexpected gains last month. Values increased by 6.5% since June, according to Halifax. The mortgage lender also said the cost of a typical property rose by almost £3,000 last month. November's increase coincided with England's second lockdown.
The average property value in the UK currently stands at £253,243. The average price has grown by over £15,000 since the end of June. In November, house prices were 7.6% higher than last year. The last five months witnessed a growth of 6.5% which is "the strongest five-monthly gain since 2004", according to Halifax.
Stamp duty holiday inspires the market
The government's decision to offer a stamp duty holiday has partly helped the recent increases in house prices. Since early July, buyers of homes with valuations of up to £500,000 have paid no stamp duty. Reduced rates have also been in use for houses above the rate. The £3.8bn stamp duty holiday is in use in England and Northern Ireland.
But people are not shopping for homes only for the stamp duty saving, experts say. Halifax's managing director Russell Galley pointed out how people's desire for something different is driving the current market. The pandemic has prompted people to reassess where and how they live.
"The current market continues to be shaped by a desire for more space, the move from urban to rural locations, and indications of a trend for more homeworking in the future," Galley said.
The pandemic has highlighted the importance of your living spaces with most stuck at home. Things like private gardens and spacious houses are on people's radars. The push to work from home has also proved you don't need to live in a big city, as you don't have to go in the office every day of the week to succeed.
Bumpier times ahead?
The market does not show signs of slowing down just yet. Buyers are looking for a fundamental shift, and news of the coronavirus vaccine have further enthused the market. Interest has been strong, especially among new buyers. The Guardian reported earlier how visits to Rightmove were up by 20% during the last three days of April compared to the first few days in the first lockdown.
However, the stamp duty holiday will end on 31 March 2021. This could risk the current enthusiasm and result in a sharp decline in house prices. Experts warn the housing market could go into reverse as a result. Nationwide cautioned about the likelihood of slowing housing market activity back in October. The mortgage lender said activity is likely to fall if the labour market weakens and the fall coincides with the end of the stamp duty holiday. For now, the increased house prices could provide some sellers with a much-needed Christmas present.