British house prices recorded their strongest growth since 2004 in November, with the average home now selling for £253,000 ($338,443).
House prices increased 7.6 per cent in November compared to the same month a year earlier, according to the Halifax's House Price Index.
"At just over £253,000, the average property price has risen by more than £15,000 since June. That equates to 6.5 per cent – the strongest five-monthly gain since 2004," said Russell Galley, managing director of Halifax.
Prices also increased 1.2 per cent compared to October, adding almost £3,000 to the cost of a typical UK home.
A desire for more space following the pandemic spurredmany to upsize or relocate after the first lockdown, with UK finance minister Rishi Sunak’s stamp duty land tax break at the start of July boosting the market further.
The tax holiday, which expires on March 31, means that nine in 10 people buying their first home or moving up the property ladder will pay no stamp duty at all, with the measure delivering an average saving of £4,500, according to HM Treasury.
However, properties sold to home movers in November recorded a much higher rate of annual house price inflation of 7.5 per cent, according to Halifax, compared to first time buyers at 5.8 per cent.
“It is interesting to note that the stamp duty saving of £2,500 on a home costing £250,000 is now far outweighed by the average increase in property prices since July," said Mr Galley.
House prices were 3.8 per cent higher in the three months ended November, with the relocating set to continue.
“With mortgage approvals at a 13-year high, 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,” said Mr Galley.
“And while industry data shows agreed sales and new instructions to sell fell to their lowest level in the past five months, both remain at historically high levels and well above seasonal norms.”
Britain's construction industry grew faster than expected in November, boosted by the strongest orders in six years amid a surge in house prices, with the IHS Markit/CIPS construction Purchasing Managers' Index (PMI), rising o 54.7 in November from 53.1 in October, its strongest level since July with new orders the highest since November 2014.
While the housing market has been much more resilient than many predicted at the outset of the pandemic, Mr Galley said many households remain confident about further price growth next year.
“However, the economic environment continues to look challenging. 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," he said.