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TODAY'S OTHER NEWS

Housing market defies gravity as prices now hit five year high

Annual house price inflation is now running at 6.5 per cent according to the latest Nationwide index after a 0.9 per cent rise in November alone.

With high demand and the stamp duty holiday still showing strong momentum, the Nationwide figures come on top of property transactions rising to 105,600 in October, the highest level since 2016, and mortgage approvals for house purchases hitting 97,500 - the highest since 2007.

Nationwide's chief economist Robert Gardner says: "The outlook remains highly uncertain and will depend heavily on how the pandemic and the measures to contain it evolve as well as the efficacy of policy measures implemented to limit the damage to the wider economy.

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"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.

Unsurprisingly, agents are delighted.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “These figures feel like the storm before the calm as buyers and sellers rushed to take advantage of the stamp duty holiday before the March deadline, despite continuing Covid restrictions in October, the possibility of a no-deal Brexit and economic growth stalling. That frenzy has been since replaced by a quieter, but just as determined mood to complete sales previously agreed. We don’t see any signs either of significant price adjustments."

Sam Mitchell, chief executive of online estate agent Strike, comments: “Transaction rates are through the roof and news of a vaccine has further boosted the confidence of sellers and buyers alike – with no signs of activity slowing down before the end of the year. People will inevitably start to question how long this can all last. However, things aren’t just going to grind to a sudden halt with the stamp duty holiday ending.”

And the director of Benham and Reeves, Marc von Grundherr, adds: “We’re seeing strong evidence of sustained defiance by the UK property market on all fronts. Mortgage approvals continue to spiral, we’re reaping the benefits of a considerable uplift in buyer demand in terms of actual transactions completing and, as a result, house prices are climbing to heights we’ve not seen in quite some time. These certainly aren’t indicators of a market running low on steam as we approach the festive period and we can expect to see this momentum carry through until spring of next year, at the very least.”

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    Defying all logic, UK property develops a bubble on a bubble...
    Sam Mitchells' assertion that the end of Stamp Duty Holiday won't make things grind to a halt it accurate in only that it's not the STH alone that has created a 2nd bubble.
    Following a few years of Brexit uncertainty and Covid lockdown, there's been a release of pent up demand of those who actually have to move etc. (Annual Transactions are down)
    Next spring, when this overflow of demand slows, PLUS the April 21 additional surcharge on foreign ownership PLUS Changes to CGT PLUS COVID (Unknown outcome at this stage) and the end of Furlough and 10s of thousands of redundancies PLUS retail, hospitality, tourism and leisure industries fold under extended periods of trade famine leading to more job losses and will slow recovery PLUS the inevitable increase in taxes to pay for CoExs' £200billion borrowing PLUS and this may be the biggest PLUS.... Brexit (Deal or no Deal).....
    For all these reasons and possibly more, the defying gravity cannot last through 2021

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