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House price growth reaches a two-and-a-half-year high

There are 50% more sales of properties in the pipeline with house prices at a two-and-a-half-year high helped by the stamp duty holiday.

Demand from first time buyers and home movers has increased pipeline sales by 50% at 418,000 worth £112 billion compared to the same period in 2019 according to the Zoopla UK House Price Index.

House price growth is averaging 3.0% over the year with average property values at a two-and-a-half-year high of £219,800 and the 20 city index average is £255,000.

Pent-up demand post-lockdown coupled with tax savings from the Chancellor’s stamp duty holiday, especially by home movers buying more expensive homes, has resulted in 140,000 more purchases.

With more buyers in the market the supply of homes has increased by 18% and in London this is 39% higher compared to last year.

House prices rise of 4% expected

Zoopla expects an upward trend for house house price growth in the next 2-3 months averaging as high as 4% by the end of the year.

Strong demand from homebuyers has improved annual house prices to 3.0% compared to 1.1% a year ago with the leading city of Nottingham up 5.1% followed by Manchester higher by 4.6%.

The table from Zoopla is the leading ten city house prices and growth over the year to September 2020.
City Current price Annual growth
Nottingham £159,800 5.1%
Manchester £175,700 4.6%
Leeds £171,400 4.5%
Liverpool £124,000 3.8%
Edinburgh £230,300 3.6%
Leicester £184,600 3.6%
Birmingham £169,000 3.3%
Sheffield £140,100 3.3%
Belfast £137,800 3.0%
Bristol £281,400 2.9%
Outside of the top ten is London with prices rising 2.4% with average property values of £476,800 and Aberdeen the only city to decrease by -0.9% year-on-year.

Not all regions have higher prices and with more properties on the market, buy-to-let investors could make offers below asking prices to improve their rental yields on investment.

House prices have been supported by the high demand after lockdown and new sales agreed since June are 40-60% up on the same month in 2019 creating pressures for lenders, agents, surveyors and conveyancers.

For remortgage buyers living in the top cities, rising house prices means they can release capital to create more space to work from home such as an extension or loft conversion.

Demand likely to run into 2021

The lockdown caused by the Coronavirus pandemic has created a ‘once in a lifetime re-evaluation of housing’ according to Zoopla and is the greatest driver of recent demand.

Changes by the Chancellor with stamp duty holiday usually distort sales volumes in a market although this is considered an extra bonus to completing before April 2021.

With the extra business volumes the property market is experiencing delays and only 25% of sales agreed in a quarter have completed in the same quarter.

Due to these delays, older equity release buyers can stay in their home rather than downsize and access the wealth in their property with a lifetime mortgage to add bi-folding doors or conservatory extension.

Sales volumes in the South East, London and the East of England are higher than this time last year and new buyer enquiries are 46% higher than a year ago although this has slowed in the last 2 weeks.

What are your next steps?

Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or a buy-to-let investor.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property to repay an interest only mortgage or pay university fees for grandchildren.

Learn more by using the property value tracker chart, mortgage costs calculator and equity release calculator. Start with a free mortgage quote or call us and we can take your details.


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    Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.


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