Biggest house price jump for FIVE YEARS: London leads the way with £500,000 average home

The housing market has recorded its strongest December in a decade after house sales jumped by nearly a third.

The boost also saw soaring house prices pushing the average house price up by 7.6% as pent up demand during the pandemic continued over the festive period. 

An estimated 129,400 house sales were recorded in December 2020, according to HM Revenue and Customs (HMRC).

The figure is 31.5% higher than the same month in 2019 and 13.1% higher than in November 2020.

It marked the strongest month of December for house sales seen in the past decade.

It also marks the first time since 2015 house sales have topped 100,000 in December – typically a quiet month for the housing market. 

In the UK as a whole, the average price of a home also rose to a record £249,633 in November, up from £231,100 a year earlier, said the Office for National Statistics.

It was the highest annual rate of growth since the Brexit referendum in June 2016.

The average property price in the capital also surpassed £500,000 for the first time, which experts said was fuelled by foreign buyers seeking to beat the end of the stamp duty holiday and the introduction of new taxes in April.

In the city, a typical property now costs £513,997 – up from £468,757 – setting another record in the market.

Jonathan Hopper, chief executive of Garrington Property Finders, said the market was ‘passing more milestones than a car in the fast lane’.

London has driven a 7.6 per cent national rise in house prices after the average property in the capital surpassed £500,000 for the first time

Busiest ever start to the year as home-hunters seek New Year moves 

Rightmove has recorded its busiest ever start to a new year, with visits to the site up 30 per cent on the same time period in 2020.

People contacting estate agents about a property to buy is 11 per cent higher than at the start of 2020, and those enquiring about a property to rent is up by 22 per cent. 

The impending end to the stamp duty holiday, more people re-evaluating where they live and the housing market staying open have all contributed to Rightmove recording its busiest ever start to a new year. 

Rightmove said it saw record viewings this week despite the new lockdown. 

The property giant said it ‘gives hope to those who already have or those who are planning to put their property on the market to sell or rent out in early 2021.’

Rightmove’s Director of Property Data Tim Bannister said: ‘January is usually one of our busiest months of the year as people start to make new year plans to move, as was the case at the start of last year when we also had the post-election bounce that gave hope of an active spring market, before that all changed with the temporary closure from March until May. 

‘We didn’t know how this year would start with so much change and uncertainty around restrictions, but it’s been reassuring for those people hoping or needing to move that the demand we’ve seen so far is the highest we’ve ever had in January.’ 

He added: ‘The blistering annual price growth recorded in November is a huge leap on the rate seen in October.’

But he warned that price growth could now slow, with the January lockdown leaving the market ‘more like a parked car, with the handbrake on but the engine revving loudly’.

The biggest increase of any London borough during November was in Kensington and Chelsea, where the average price rose 28.6 per cent to a staggering £1.5million.

There were also big increases in other parts of England. Prices in Yorkshire and the Humber rose by 9.7 per cent, while they rose 8.5 per cent in the South West and North West and by 8.3 per cent in the North East. 

The ONS said the market had been boosted by Rishi Sunak’s stamp duty holiday, pent-up demand following the national lockdown and ‘changes in housing preferences’ caused by the pandemic, with many families seeking more spacious homes. 

This was underlined by figures showing that while UK prices for flats and maisonettes were up annually by 5.4 per cent, prices for detached houses had jumped 8.5 per cent. 

Estate agents predict a further boom in sales in London in the wake of an exodus of City workers last year, who fled lured by the prospect of working from homes in the countryside and on the coast. 

London-based estate agent Dexters said it expects to see sales and lettings transactions in the Capital doubling in volume during 2021, with the boroughs of Camden, Kentish Town, Tufnell Park and Kensington and Chelsea tipped to be the year’s ‘star performers.’ 

Dexters said they currently have more than 100,000 people registered looking for a London home, as well as thousands of enquiries from international buyers looking to snap up properties in the Capital once overseas travel resumes. 

Property listing website Rightmove, meanwhile, has seen a record number of viewings this week, recording its busiest ever start to a new year.

The firm said the number of people contacting estate agents about a property to buy is 11 per cent higher than at the start of 2020, and those enquiring about a property to rent is up by 22 per cent. 

But while some families have ditched big cities for more rural areas, the ONS said that changes to taxes for foreign buyers in April are likely to have boosted demand in the capital as well.

London-based estate agent Dexters said it expects to see sales and lettings transactions in the Capital doubling in volume during 2021, with the boroughs of Camden, Kentish Town, Tufnell Park and Kensington and Chelsea tipped to be the year’s ‘star performers’ (pictured in this map)

In the UK as a whole, the average price of a home rose to a record £249,633 in November, up from £231,100 a year earlier, said the Office for National Statistics

In the UK as a whole, the average price of a home rose to a record £249,633 in November, up from £231,100 a year earlier, said the Office for National Statistics

HMRC said the house sales jump is also likely to reflect the continued release of pent-up demand within the property market since the start of the coronavirus lockdowns in March, alongside a temporary stamp duty holiday.

Between April and December 2020, 750,540 sales are estimated to have taken place, which is still lower overall than the 880,580 sales recorded in the same period a year earlier.

Anna Clare Harper, chief executive of asset manager SPI Capital, said: ‘These figures represent recovery rather than boom.’

She added: ‘Transactions have been dominated by second-time buyers, typically trading up to improve their surroundings, rather than first-time buyers getting a foot on the ladder.’

Mike Scott, chief analyst at estate agency Yopa, said: ‘This is a good result, since the housing market was effectively closed from late March to mid-May, and means that there was a considerable amount of catch-up in the second half of the year.’

House sales plunged by around 50% in April and May 2020 compared with April and May 2019, caused by the economic impacts relating to the coronavirus pandemic and public health restrictions introduced by the UK Government, the report said.

RUTH SUNDERLAND: There’s hope this house price boom may be far from over 

Commentary by RUTH SUNDERLAND BUSINESS EDITOR FOR THE DAILY MAIL

COVID-19 has caused more damage to the UK economy than any other crisis in living memory, yet the housing market is booming. So why is this happening and equally important, can it continue?

The pandemic forced many of us into stay-at-home lifestyles, which made people discontented with their existing properties and keen to move to a bigger and better place.

Crucially, many middle-class professionals can afford to turn those desires into reality, having hung on to their jobs and racked up large sums in lockdown savings.

On top of that, there is a large element of pent-up demand because the market was shut during the first lockdown in the spring. Buyers rushed back in the minute it re-opened.

COVID-19 has caused more damage to the UK economy than any other crisis in living memory, yet the housing market is booming. So why is this happening and equally important, can it continue?

COVID-19 has caused more damage to the UK economy than any other crisis in living memory, yet the housing market is booming. So why is this happening and equally important, can it continue?

Add into the mix Chancellor Rishi Sunak’s stamp duty holiday and interest rates at near to zero – the main Bank of England rate was slashed to 0.1 per cent in response to the virus – and you have a recipe for a surge in house prices.

The detailed picture is intriguing. Surprisingly, at least for those commentators forecasting an exodus from London in favour of working from home from a bucolic idyll, prices in the capital have soared to a record high.

Increases in some exclusive enclaves such as Kensington and Chelsea, where a townhouse will cost you nearly 30 per cent more than a year ago, are driven by special circumstances.

These include the flight to the UK of wealthy individuals from Hong Kong, along with the rush among rich international buyers to beat a new additional rate of stamp duty which is due to be slapped on non-UK residents from April.

Add into the mix Chancellor Rishi Sunak’s stamp duty holiday and interest rates at near to zero – the main Bank of England rate was slashed to 0.1 per cent in response to the virus – and you have a recipe for a surge in house prices

Add into the mix Chancellor Rishi Sunak’s stamp duty holiday and interest rates at near to zero – the main Bank of England rate was slashed to 0.1 per cent in response to the virus – and you have a recipe for a surge in house prices

But the robust performance in more ordinary boroughs suggests that so long as power and influence are concentrated in London, it will remain a honeypot for the ambitious and talented.

So much for predictions the capital will morph into a ghost town, hollowed out by Covid.

Some analysts argue rises of this order are unsustainable and that we are riding for a fall. The economy in their view is being artificially propped up by government support. 

When the furlough scheme ends, unemployment will shoot up, launching a torpedo at property prices. There are also fears the end of the stamp duty holiday could hit values.

Increases in some exclusive enclaves such as Kensington and Chelsea, where a townhouse will cost you nearly 30 per cent more than a year ago, are driven by special circumstances

Increases in some exclusive enclaves such as Kensington and Chelsea, where a townhouse will cost you nearly 30 per cent more than a year ago, are driven by special circumstances

The EY Item Club, which bases its forecasting on Treasury models, is predicting a 5 per cent fall by the end of this year, as does respected think tank the Centre for Economic and Business Research.

But if the vaccine roll-out is successful and the economy is brought out of the deep-freeze, the market may well prove the pessimists wrong, as it has consistently over the last 30 years.

Mortgages are likely to remain affordable and interest rates are not expected to be hiked any time soon – indeed, they may even fall further.

And, with returns on savings virtually non-existent, for many property will continue to look like an attractive investment.

Rising house prices are a mixed blessing because they make it harder for young people to put a foot on the ladder.

But taken in the round, it is a very good thing indeed that the property market, the bedrock of the UK economy, has proved so resilient – and the Chancellor should extend the stamp duty holiday to help keep it that way.