(Washington Insider Magazine) -The three-month period ending in November saw a 3.4% increase in house prices resulting in the most significant increase since late 2006. They are also 8.2% higher than one year ago.
According to the mortgage lender, November saw a new record-breaking high in UK property prices of £272,992
According to the report, the pace of growth is unlikely to continue next year due to pressure on household finances.
Manufacture shortage
Halifax reported that the price of houses in the UK has increased for five straight months.
Halifax’s managing director, Russell Galley, said the low mortgage rates are due to a lack of properties available, a strong labour market, and intense competition among lenders.
Earlier this year, Halifax claimed that the Coronavirus pandemic had put pressure on the housing market. Stamp duty holidays, which fueled earlier demand, have led to fewer completions, although the break ended at the end of September.
Low-interest rates make borrowing more affordable, making it more appealing to get a mortgage. In addition, the job market is booming.
The pandemic brought more time spent at home, and people sought larger properties. Despite the “race for space”, Halifax indicated that the trend is changing as more people begin to rent flats.
Financial pressure
The lender said that house prices are likely to slow down in the coming year.
Although interest rates will rise to combat inflation, when it happens is not known due to uncertainty about the Omicron coronavirus.
According to Halifax, there are other factors that may contribute to a slower pace of inflation than the pandemic.
Houses are now more affordable than ever, and household budgets are only going to be put under more pressure in the months ahead.
In addition to forcing many of us to spend many weeks in our homes, Danni Hewson, financial analyst at AJ Bell, said Lockdowns also forced us to rethink what we expected from our homes.
Mix in a stamp tax holiday, and you have a recipe for setting the housing market ablaze.
She stated that the market was still “warm and toasty” after the stamp duty holiday.
She said that uncertainty about the Omicron variant would “likely slow the market, and there is no question that the price increases that we have seen in the past 18 months are unsustainable”.