With Nationwide data showing that average house prices rose 2% to a record £224,123 in August, the Centre for Economics and Business Research (CEBR) says the climb is likely to be an anomaly driven by a temporary stamp duty cut and pent up demand as the market stalled amid the lockdown. The tax cut had raised prices by 1.2% and increased transactions by 6%, it estimated. Using pre-pandemic average transaction data, the CEBR estimates that 150,000 sales were delayed, equivalent to two months of activity. The CEBR says its analysis points to prices falling “significantly” toward the end of 2020 and into the first half of 2021. It said that while prices might see a “short spike” as the stamp duty cut draws to an end next March, average house prices are forecast to be 13.8% lower in 2021 than in 2020.
The Times (14/09/2020)