- UK house prices have surged to a 14-month high following last month’s election.
- Nationwide reported a 1.4% jump in property prices from December to January, and about 1.9% higher than a year ago.
- Experts say the 2020 UK real estate landscape is set to rebound even further, with some being forced to readjust their earlier forecasts.
Following last year’s election, the UK annual house price growth rose to a 14-month high as investors’ confidence returns in the region’s markets.
One the leading mortgage lenders in the UK, Nationwide Building Society, reported property prices had risen by 1.4% from December to January, and about 1.9% higher than a year ago, marking the fastest annual growth since November 2018. On average, a house in the UK now costs £215,897, 0.5% or £615 higher than December last year.
According to Chief Economist Robert Gardner from Nationwide: “Healthy labour market conditions and low borrowing costs appear to be offsetting the drag from the uncertain economic outlook.”
The record growth comes after one of the slowest years in the history of the UK’s real estate, having gained less than 1% in a whole year.
Nationwide’s report backs the already evident signs of a recovering real estate market. The British high street banks mortgage approval rose to a five-year high in December last year.
Some analysts say the rally is due to the “Boris bounce” following his re-election last month, but they also warn it could be short-lived, as the Brexit uncertainty continues to hang over the UK’s property market.
Zoopla, a property website, yesterday released separate findings saying the property prices for UK’s top 20 cities jumped by about 3.9% as of this month, with Edinburgh recording the highest growth of 6.1% while London gained 1.9%, the most significant increase in two years. The report also noted demand for housing units within the surveyed cities had risen by 26%.
But some analysts forecast a more considerable surge in the region’s property market.
“Indicators of demand at the very start of the home buying process are red-hot. We think the pickup in demand can be sustained this year by the continuation of low mortgage rates and solid wage growth, driving prices up by about 4%,” chief UK economist at Pantheon Macroeconomics, Samuel Tombs stated.
EY Item Club chief economic advisor Howard Archer also said that they had adjusted their annual price growth forecast for UK houses from 2% to 2.8% saying: “There is clearly a possibility that they could rise more than this.”