UK house prices rise by 8.5% in 2020 – ONS

The average house price in the UK increased by 8.5% over the year to December 2020 to stand at a record high of £252,000, according to the Office for National Statistics (ONS).

The latest ONS House Price Index revealed the most recent increase in house price growth represented a climb from 7.1% over the year to November 2020.

This was the highest annual growth rate the UK has seen since October 2014, meaning the average house price is now £20,000 higher than it was in December 2019.

On a monthly basis, the data showed that house prices increased by 1.2% between November and December compared with a decrease of 0.1% in the same period a year ago.

Across the UK, average house prices increased over the year by 8.5% in England to £269,000, by 10.7% in Wales to £184,000, by 8.4% in Scotland to £163,000, and by 5.3% in Northern Ireland to £148,000.

The North West of England was the region with the highest annual house price growth, with average prices increasing by 11.2% in the year to December – a figure up from 8.0% in November.

The lowest annual growth was in London, where average prices increased by 3.5% over the year to December, which was down from 7.0% in November. London’s average house prices remain the most expensive of any region in the UK at an average of £496,000 in December.

Commenting on the latest figures from the ONS, Hargreaves Lansdown personal finance analyst, Sarah Coles, suggested that a “December house-buying frenzy” has left buyers and sellers exhausted.

“House prices surged to a record high in December, up almost £20,000 since the onset of the pandemic,” Coles said. “Buyers have been spurred on by the race for space and the clamour to get over the finish line before the stamp duty holiday deadline. However, there’s every sign that in 2021, the race is over.

“Lockdown has persuaded buyers and sellers to pause for breath. The market remains open, but there’s a reluctance to view properties or open homes at a time when the virus is so prevalent. Meanwhile, everyone involved in the sales process is having to work around social distancing rules, creating delays in everything from conveyancing to surveying properties. It means offers made in 2021 are highly unlikely to complete by the stamp duty holiday.

“The Chancellor could breathe some new life back into the market in the Budget, if he makes some kind of concession for people mid-sale when the stamp duty rules change. However, there’s no guarantee he’ll do this, and even if he does, buyers and sellers may be reluctant to get back into the race.”

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