Price of homes in the U.K. rose more than expected in November due to pandemic-driven demand and shortages in houses for sale, Nationwide Building Society said on Wednesday.
Average home prices increased by 0.9 percent to 252,687 pounds ($337,600) in November from the month before, according to Nationwide, outstripping economists’ expectations of an increase around 0.4 percent.
Annual growth inched up to 10 percent despite the end of a tax cut in September as pandemic-induced factors continued to stoke demand.
“Activity has been extremely buoyant in 2021,” Robert Gardner, Nationwide’s Chief Economist, commented on the report.
Gardner added: “The number of housing transactions so far this year has already exceeded the number recorded in 2020 with two months still to go and is actually tracking close to the number seen at the same stage in 2007, before the global financial crisis struck.”
Tough competition among mortgage lenders have also brought borrowing costs down to a record-low 1.59 percent in October, according to figures from the Bank of England.
Gardner noted that the property market’s outlook remain uncertain as some factors suggest that activity may slow soon. The Omicron variant of COVID-19 may contribute to a slowdown, he added.
“While consumer confidence stabilized in November, sentiment remains well below the levels seen during the summer, partly as a result of a sharp increase in the cost of living,” said Gardner. “Moreover, inflation is set to rise further, probably towards 5% in the coming quarters.”
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