New data from Halifax found that house prices in the UK hit a record average price of £253,374 – however, prices are likely to fall over the year.
Pent-up demand and the stamp duty holiday has led to a surge in house prices and they ended 2020 6% higher than the same period in 2019.
Russell Galley, the managing director of Halifax, said: “Prices soared as a result of pent-up demand, a desire among buyers for greater space and the time-limited incentive of the stamp duty holiday.”
“With the pace of the UK’s economic recovery expected to be constrained by the renewed national lockdown, and unemployment widely predicted to rise in the coming months, downward pressure remains likely as we move through 2021.”
The stamp duty holiday ends in March and the the help-to-buy scheme to new homeowners will tighten from April.
Miles Robinson, the head of mortgages at the online broker Trussle, commented on the housing boom: “What was first considered a mini-boom by the industry has gone further than many predicted.
“Mortgage approvals topped 100,000 in November, the highest on record since 2007. However, while the outlook is promising for the immediate future, we must remain cautious of a potential dip in spring as the stamp duty holiday and furlough schemes come to an end and the impact of a third national lockdown unravels,” he added.