UK property prices have seen their strongest five-month run of growth since 2004, despite tighter lockdown restrictions in November.
Figures from lender Halifax show the average UK property sold last month was bought for £253,243 ($336,195). It marks a 1.2% jump of almost £3,000 on October prices, and a 7.6% increase year-on-year—the biggest annual jump since June 2016.
The data shows continued momentum behind the property market boom seen in recent months, in spite of stricter coronavirus restrictions and their economic fallout.
England’s one-month coronavirus lockdown ended last week, and similar measures were place in Wales, Northern Ireland and areas of Scotland for part of November. Building sites and estate agents in England were able to remain open however, while property viewings and surveys continued.
It comes after a leading construction industry survey on Friday showed new orders hitting a six-year high, driven by strong demand in the housebuilding sector.
Duncan Brock, group director at the Chartered Institute of Procurement & Supply (CIPS), which co-compiles the purchasing managers’ index (PMI) poll, said it reflected buyers “rushing to meet the stamp duty relief deadline less than four months away.”
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Meanwhile recent Bank of England showed mortgage approvals hit their highest level since 2007 in October.
Demand for home moves has been strong since Britain’s first nationwide lockdown was lifted earlier this year. Stamp duty cuts in England and Northern Ireland have further fuelled the surge in activity.
Russell Galley, managing director of Halifax, said average transaction prices were £15,000 higher than in June, the biggest five-month gains in 16 years. "The current market continues to be shaped by a desire for more space, the move from urban to rural locations and indications of a trend for more home working in the future.”
He has previously highlighted how surging demand for larger homes has pushed up average transaction prices. Zoopla research has also shown wealthier buyers' purchases of such properties make up an increasing share of all sales.
“The house price growth we’re seeing is great news for homeowners but a horror story for anyone looking to get onto the property ladder,” noted Olu Olufote, founder of purchase support platform Renter Buyer.
Galley said industry data showed agreed sales and new instructions to sell had fallen to their lowest level in five months, however. "With unemployment predicted to peak around the middle of next year, and the UK’s economy not expected to fully recover the ground lost over 2020 for a number of years, a slowdown in housing market activity is likely over the next 12 months.”
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, also said in a recent note the market looked set to weaken “sharply” once the temporary threshold changes to stamp duty expire at the end of March.
“The combination of a weakened labour market and higher mortgage rates, reflecting the greater risks of lending in the current environment, points to lower levels of activity next year and a partial reversal of this year’s surge in house prices,” he wrote.