The growth of British house prices accelerated last month and the market was holding up despite the end of pandemic emergency support measures for housing and the broader economy, mortgage lender Nationwide said on Wednesday.
House prices rose by 0.9 per cent in November compared with October when they rose by 0.7 per cent, Nationwide said. A Reuters poll of economists had pointed to a monthly 0.5 per cent increase.
The increase left house prices 10 per cent higher than in November 2020, above a median forecast of 9.3 per cent in the Reuters poll.
Nationwide chief economist Robert Gardner said house prices were now almost 15 per cent above their level in March 2020 when the pandemic swept Europe.
“Underlying activity appears to be holding up well,” Gardner said.
Demand for housing has been strong in Britain – and many other countries around the world – since the lifting of the first coronavirus lockdown last year, boosted by demand for bigger properties as more people work from home.
The British market was also stoked by a tax incentive offered by finance minister Rishi Sunak which fully expired at the end of September, when a jobs support programme also lapsed.
Since the end of the furlough programme there has been no sign of a big jump in unemployment.
“If this is maintained, housing market conditions may remain fairly buoyant in the coming months, especially since the market has momentum and there is scope for ongoing shifts in housing preferences, as a result of the pandemic, to continue to support activity,” Gardner said.
A shortage of homes for sale has also continued to support house prices.
Gardner said the outlook remained uncertain due to factors such as the possibility of the Bank of England raising interest rates and the impact of the Omicron variant of the coronavirus on public health and the economy.
“Indeed, house price growth has been outpacing income growth by a significant margin and, as a result, housing affordability is already less favourable than was the case before the pandemic struck,” he said.