According to the reallymoving House Price Forecast for October 2020, UK house prices have continued to rise month to month in 2020. From September to October, average prices increased by 6.1%, from an average price of £314,706 to £333,830.
The forecast predicts that prices will increase by a further 1.1% into November and then 1.5% into December. In December, house prices are expected to hit an all-time high, with an average price of £342,511, compared to last year’s December house prices, this is an increase of 17.5%.
As we move into the new year, we are expected to hit a readjustment period and prices will slowly start to decline once again, with a decrease of -1.2% for the average UK house price in January. This will be the first time average price has decreased in seven months. However, the annual change is still overwhelmingly positive, with a difference of 15% compared to January 2020.
The increase in house prices up to the end of the year is down to the increased demand from buyers due to the Stamp Duty holiday. The holiday means that Stamp Duty does not have to be paid on properties up to £500,000, until 31st
March 2021. The cost of moving has therefore become much lower, meaning many people have taken the opportunity to move, leading to the increase in house prices.
The reason for the dip in the new year comes from the fact that demand began to fall in October 2020, as people became less likely to complete their move before the Stamp Duty holiday ends.
In terms of regionally specific changes; London, Northern Ireland, Wales, the West Midlands, the South an East of England are set to have slight increases in house prices into January 2021, with the highest increase being in Northern Ireland, with a 3 month increase of £14.70%.
Alternatively, Scotland, the East Midlands and the North of England will see a small drop in house prices into January 2021, with the biggest decrease being a 3 month change of -8% in the North East.
You can see more in our October 2020 Forecast