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House prices rise 7.3% in a year to an average £250K

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The annual growth in property prices may be strong, but there are concerns the housing market is already starting to run out of steam
House prices rise 7.3% in a year to an average £250K

The average UK property price has risen by 1.3% in September to £249,870, according to Halifax.

The lender said this is a significant 7.3% higher than a year ago, and the largest annual rise in four years.

Managing director Russell Galley, said: “Few would dispute that the performance of the housing market has been extremely strong since lockdown restrictions began to ease in May. Across the last three months, we have received more mortgage applications from both first time buyers and homemovers than anytime since 2008.

Future uncertain

But Galley is cautious about the future. He admitted: “It is highly unlikely that the housing market will continue to remain immune to the economic impact of the pandemic. The release of pent up demand and indeed the stamp duty holiday can only be temporary fillips and their impact will inevitably start to wane. And as employment support measures are gradually scaled back beyond the end of October, the spectre of increased unemployment over the winter will come into sharper relief.

Jonathan Hopper, CEO of Garrington Property Finders, agreed the mini-boom could be running out of steam: “On the front line, there are early signs of a reality check on prices,” he said.

“Even in popular areas, we’re seeing fewer buyers chasing every property and local lockdowns appear to be further polarising regional markets.

“Most striking of all, we’ve started to see price reductions by overzealous sellers who have been forced to recognise that their initial pricing expectations were too ambitious.”

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