Nationwide Building Society, the UK’s second-largest mortgage lender, has predicted that house prices will continue to rise this year beyond the end of the stamp duty holiday.
The lender has warned, however, that higher costs could make it harder for first-time buyers to get on the property ladder.
The society’s chief executive, Joe Garner, said everyone had been a “little bit surprised” by how strong the housing market had been throughout the Covid crisis, even when taking government support, including business loans and wage subsidies, into consideration.
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Figures published by the Office for National Statistics last week showed house prices rose 10.2 per cent in the year to March, the highest annual increase since the lead-up to the financial crisis in August 2007.
Mr Garner said demand had been underpinned by a “structural shift” in the kind of homes that buyers were looking for in the wake of the Covid-19 pandemic, which has caused a home-working boom, and fuelled interest in larger homes with gardens outside city centres.
Mr Garner said: “People don’t say: ‘Oh look, there’s a discount on stamp duty, let’s move home.’ That’s not how it works. People are thinking of their house less as an investment and more as a home.”
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A Nationwide survey of homeowners last month found that 25 per cent were either considering, or in the process of, buying a house as a result of the pandemic, compared with 28 per cent in September. Usually, only about five per cent of homes switch hands in the UK, meaning that only a small portion of those homeowners need to act in order to keep the housing market moving.
Mr Garner continued: “There will be periods when it goes down a bit, but particularly as people are buying much more for their long-term home, it doesn’t matter so much the day-to-day value of the property if it’s somewhere they really want to live.”
Source: Scottish Legal
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