The Office for National Statistics (ONS) has published its UK House Price Index for December 2020, showing that house prices rose 8.5% on the year.
According to ONS, this is the highest growth rate the UK has seen since 2014 and brought the average house price to a record high of £252,000.
Breaking down the average house prices for the UK nations, we see England at the top with an average price of £269,000, then Wales with £184,000, Scotland with £163,000, and Northern Ireland with £148,000.
In England, the largest growth was found in the North West where prices jumped up by 11.2%. The lowest was London, with prices rising by a more modest 3.5%. All other English regions enjoyed at least a 6% boost, with the East Midlands seeing 10.6% growth, Yorkshire & Humber up by 10.4%, and the South West up 10.2%.
While this is all interesting data, it tells a story many of us already knew – the pandemic brought an unprecedented boom to the UK housing market. As we move forward into 2021, however, many things remain unknown.
The stamp duty holiday is destined to end on March 31st and some experts predict and a sharp drop in demand and house prices when this happens. If so, the boom of 2020 could be a freak, temporary thing we soon forget.
However, the opposite school of thought says that the pandemic has created permanent change in our lives, much of which is being manifested in our desire to move to new, bigger, perhaps less urban living environments. Even as stamp duty returns, this should not be dampened.
Furthermore, stamp duty is only ever applied to properties of certain values and rarely applies to first-time buyers. This means much of the existing demand is not at all related to the stamp duty holiday and should, therefore, remain strong as we travel deeper into 2021.
As such, we should expect to see continued price growth for some time to come, but nowhere near the speed of ferocity as we have seen over the past six months.