UK house prices grow at fastest pace since 2014 - but London property slumps
London house prices uk house prices
UK house prices grew at the fastest pace in more than six years in December, but property price growth in London slowed, according to the latest official data.
The average price of a house in the UK increased 8.5 per cent in the year to December, up from 7.1 per cent in the previous months, to a record high of £252,000.
The Office for National Statistics said it was the highest annual house price growth rate seen in the UK since October 2014.
London recorded the lowest annual growth rate in the UK, where average house prices increased 3.5 per cent in the year to December, down from seven per cent in November.
London house prices dipped compared to the previous month.
The capital saw average house prices slump by £5,000 between November and December 2020, while in the same period the previous year property values jumped by £10,000.
Ross Counsell, a director at Goodmove, said: “We know the pandemic has caused house buyers to reassess their housing preferences and are rapidly moving out of flats into more spacious properties, and with such a high demand, comes higher average prices.”.
He added: “Looking further into the year, we still stand by our predictions that house prices will begin to fall post-Stamp Duty Holiday.
“We may also see house prices in London and our cities starting to rise again as the world resumes some normality, with people moving to the capital for work or study opportunities.”
Howard Archer, the chief economist of EY Item Club, said elevated housing market activity and robust prices “will prove unsustainable sooner rather than later” and predicted that house prices will fall by around five percent this year.
“The EY ITEM Club believes that the housing market is likely to come under mounting near-term pressure as the economy continues to be affected by major restrictions in most areas, while there may well still be a significant rise in unemployment despite the furlough scheme being extended until April” he said.
“Meanwhile, earnings growth looks likely to be limited and there is also likely to be a fading of the pent-up demand effect on housing market activity.”