UK house prices reach record high, but market forecast to slow

The housing market suffered in March when it was effectively shut down at the start of the lockdown as people were urged to avoid moving and viewings stopped.

But restrictions were eased in May and Chancellor Rishi Sunak introduced a stamp duty holiday in July, giving the market a boost. 

A number of estate agents have reported people are seeking more space to live and work in following the coronavirus outbreak.

Halifax’s Galley said “Overall we saw a broad continuation of recent trends with the market still predominantly being driven by home-mover demand for larger houses." Since March flat prices are up by 2% compared to a 6% increase for a typical detached property. 

In cash terms that equates to a £2,883 increase for flats compared to a £27,371 rise for detached houses.  

But Galley cautioned: “While Government support measures have undoubtedly helped to delay the expected downturn in the housing market, they will not continue indefinitely and, as we move through autumn and into winter, the macroeconomic landscape in the UK remains highly uncertain.”

He said: “Though the renewed lockdown is set to be less restrictive than earlier this year, it bears out that the country’s struggle with Covid-19 is far from over. With a number of clear headwinds facing the housing market, we expect to see greater downward pressure on house prices as we move into 2021.”