The annual growth in property prices may be strong, but there are growing signs that the housing market is starting to run out of steam.
The latest data from the Office of National Statistics (ONS), based on completed housing transactions, shows that residential property prices hit a record high of £245,000 in October 2020, following annual growth of 5.4%, up from 4.3% in September 2020.
On a non-seasonally adjusted basis, average house prices in the UK increased by 0.7% between September and October 2020, compared with a fall of 0.3% during the corresponding period a year earlier.
The UK Property Transactions Statistics showed that in October 2020, on a seasonally adjusted basis, the estimated number of transactions of residential properties with a value of £40,000 or greater was 105,630. This is 8.1% higher than a year ago. Between September and October 2020, UK transactions increased by 9.8% on a seasonally adjusted basis.
House price growth was strongest in Scotland where prices increased by 6% in the year to October 2020, up from 4% in the year to September 2020. The lowest annual growth was in the East of England, where prices increased by 3.4% in the year to October 2020, down from 4% in the year to September 2020.
However, there are signs that the housing market is showing signs of “cooling off”, according to Nicky Stevenson, managing director at Fine & Country.
She said: “It was never the case that this unexpected pandemic mini-boom would continue forever and we’re already seeing signs of this property frenzy cooling off.
“In fact, a lot has changed in the past two months. The initial surge of buyers motivated by a desire for more space and the chance to capitalise on the stamp duty holiday has already now passed.”
Stevenson pointed out that the latest data from Rightmove, released earlier this week, revealed that asking prices have dropped by 0.6% in December, in a “second monthly decline”.
The housing market is widely expected to slow next year, with some commentators predicting a slump in property prices, but Stevenson told the press that she is hopeful that, based on the latest data, “a hard landing” can be avoided next year.
She added: “Significant outright price falls remain unlikely in 2021, although the appetite for larger properties is here for the long haul and will continue to disguise the underlying performance of the market to some degree.”
What’s this the spectre at the feast ?
“You’ll never find a rainbow if you’re looking down”
Charlie Chaplin
“If you expect the worst, you’ll never be disappointed.”
― Sarah Dessen, Lock and Key
The tide might have turned but like the Severn Bore the wave still surging upstream like a ball rolling for sometime yet
The market traditionally cools in November & December in any event but still considerably more frothy than this time last year for many branches still enjoying great swathes of inventory in the pipeline ,sold STC
Just ask Freeman & Forman part of Countrywide in deepest Kent or Dixons in the West Midlands who are already getting those listed in December away.despite all the handicaps
Agents are creative beasts and they will be exercising all their skillsets to get deals over the line .There are insurance polices available to counteract any delays in searches
“The market is widely expected to slow next year”
Jan, Feb & March are likely to be very busy indeed for agents .Prices likely to be under the cosh but this doesn’t necessarily mean activity will cliff fall .
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It’s Christmas!!! Market comment is pointless. We’ve already sold 3x what we would normally at this time of year and there are 7 days left. Enjoy!
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Breaking news – The housing market is cooling off on the 17th of December! It’s obvious. We’re estate agents. The same thing happens every year.
I’ve said the same about the Guild and I assume F&C and the Guild use the same PR company. Press releases that state the blindingly obvious dent the credibility of the company issuing them.
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In other news, widespread panic as transactions on Christmas day are expected to remain at zero.
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Haha!!
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Boring!
Some PR for Nikki though which seems the only reason anyone would write an article of the market cooling in December when it cools every year.
Come on editors if you haven’t got anything to write then don’t!
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In the New Homes market place we are still selling fast-especially where product is build ready for end Q1. I am finding that the usual Dec slowdown hasn’t hit yet but think by Monday it probably will.Commuter belt extremely active.
More time to get those deals to exchange ! God willing.
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