With reports on December’s house prices now available, we can look back at what happened to house prices in 2020. It’s fair to say they didn’t go as many predicted.
According to the Nationwide House Price Index for December 2020, annual growth rose to 7.3%. They report that this is the highest growth for 6 years.
The Halifax House Price Index for December reported an annual increase in house prices of 6%. Even if you make allowances for regional differences between these two reports, this is still positive for house price growth.
The Hometrack House Price Index for December gives an annual figure of 4.3%. This report states it doesn’t rely on regional averages. It analyses housing market trends on a city level.
The Hometrack report also provides a 20 City Summary which lists them in order. According to this, the top 6 cities in 2020 were Liverpool, Manchester, Nottingham, Leeds, Leicester and Sheffield.
It goes on to say that growth has hit a 10 year high in northern English regions. Many have predicted that this will continue in 2021.
London was 16th with growth of 2.9%.
The Hometrack report states that there has been stronger demand in January compared to the same period last year.
It goes on to say that supply has reduced and this could be influenced by the 3rd lockdown.
The Halifax House Price Index published this month states that house prices in January 2021 are 5.4% higher than in January 2020.
However, it goes on to say that house prices in January 2021 are actually 0.3% lower than December 2020. It states that this could be early signs that the market could be starting to cool.
Stamp Duty obviously had an effect on demand in the second half of 2020. Attention has now turned to whether the stamp duty deadline of March 31st should be extended.
As a result of this and the unexpected growth in 2020, it’s no surprise that many have refrained from making their usual predictions for 2021.
On the positive side, demand is high, lenders are looking to lend, rates are still very low and the Housing Market remains open for business. However, with supply reducing, current restrictions in place, ongoing uncertainty and the stamp duty deadline looming, house price data for the next 3 months should make for interesting reading.