Jamie Durham, economist at PwC, comments on the latest UK house price data:
“This morning the ONS released its House Price Index for August. Average UK house prices reached an all-time high of £239,000, and prices rose on an annual basis by 2.5%.”
“This data is further evidence that activity in the housing market has rebounded since restrictions on the housing market were lifted in May.”
“There are a number of factors that are helping to buoy the market. There is likely to be pent up demand both from when the market was closed earlier this year, as well as from a generally weaker market over the last few years. Lockdown may have also caused some people to reassess the type of property they want to live in, leading to some extra demand as people look to move.”
“Under current rules, people can continue to move and view homes in tier 3 areas. While this is likely to limit the impact on the housing market compared to earlier this year, lockdown restrictions may introduce uncertainty both locally and nationally. Uncertainty may cause people to delay major financial decisions such as moving home and lead to weaker house price growth over the coming months.”
“Assuming there is a relatively limited second peak in COVID-19 cases, with no nationwide lockdown, house prices could grow nationally by around 1% in 2021. If further measures are introduced to control the spread of the virus, house prices could fall in 2021.”
For more information on our research and forecasts, published 6th October 2020, please visit: https://www.pwc.co.uk/services/economics/insights/uk-economic-update-covid-19.html
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