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House prices at record high as stamp duty holiday spurs growth

Written by: Lana Clements
House prices increased at their fastest level in five years to reach a new record high in October.

Values are worth an average £227,826, marking annual growth of 5.8%, as measured by Nationwide.

Prices jumped by 0.8% month-on-month and followed a 0.9% rise in September.

However, the fragile economy and rising unemployment means the outlook for price growth remains uncertain, according to experts.

Robert Gardner, Nationwide’s chief economist, said: “Behavioural shifts as a result of Covid-19 may provide support for housing market activity, while the stamp duty holiday will continue to provide a near-term boost by bringing purchases forward.

“However, activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “The end of the stamp duty deadline is a concern, and needs looking at by the government, although it is focusing buyers’ minds on getting deals done in the short-term.

“The problem borrowers face is lenders’ service levels, with some struggling with the rise in demand.

“Price and criteria are key when choosing a mortgage, but borrowers must also consider how long a lender is going to take.

“Nationwide reports that many homeowners are staying put and improving rather than moving.

“Refinancing to raise money to pay for refurbishments is proving popular as the lockdown experience makes many of us think differently about our homes.”

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