UK house prices were 0.2% higher in December than they were in November as they ended 2020 at a record high, according to the latest Halifax House Price Index.

Halifax’s data revealed that the sixth consecutive month of growth also meant that house prices in the fourth quarter of the year were 2.6% higher compared to Q3.

With prices 6.0% higher in December than they were in the same month in 2019, Halifax managing director, Russell Galley, noted that they had now reached a fresh record of £253,374.

Galley called 2020 “a tale of two distinct halves for the housing market”.

“Following a strong start, the first half was dominated by the restrictions on movement due to COVID-19, and prices were subsequently down 0.5% at mid-year as the market effectively ground to a halt,” he said.

“However, when the market reopened, prices soared as a result of pent-up demand, a desire amongst buyers for greater space and the time-limited incentive of the stamp duty holiday.”

Halifax’s Index also stated that the annual rate of inflation did fall compared to November (+7.6%) – to stand at its lowest level since August – but also noted that this reflected a strong period for house prices towards the end of 2019, as political uncertainty at that time began to ease.

“In the near-term, and with mortgage approvals still sitting at a 13-year high, there may be enough residual strength in the market to sustain prices up to the deadline for the stamp duty holiday and the scaling back of Help to Buy at the end of March,” Galley added.

“However, with the pace of the UK’s economic recovery expected to be constrained by the renewed national lockdown, and unemployment widely predicted to rise in the coming months, downward pressure on house prices remains likely as we move through 2021.”

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