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House prices rose by 0.8% in December alone, barely slowing from
the 0.9% recorded in November, and were 7.3% higher than a year
earlier, well above forecasts in a Reuters poll for a 6.7% rise.
After a collapse in house purchases during the first months of
lockdown, there has been a surge in demand to move house, driven
in part by a temporary exemption of property purchase taxes
which will expire at the end of March.
Nationwide said the strength of the housing market contrasted
with weakness in some other parts of the economy - especially
those exposed to renewed COVID-19 restrictions - and said the
outlook for prices in 2021 was highly uncertain.
"Housing market activity is likely to slow in the coming
quarters, perhaps sharply, if the labour market weakens as most
analysts expect, especially once the stamp duty holiday expires
at the end of March," Nationwide economist Robert Gardner said.
So far furlough payments and similar support for the
self-employed had limited the impact of a historic 26% fall in
economic output on the housing market, against most economists'
earlier expectations, he added.
Demand for detached homes had risen most, with an average rise
of just over 8% in the past 12 months, while prices for flats
had risen by 4%.
(Reporting by David Milliken; Editing by Andrew Heavens)
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