House prices rise during midst of pandemic

House prices rise during midst of pandemic

The last 12 months have been memorable for a variety of reasons. We started the year strong, then the global Covid 19 pandemic brought the country, and the economy, to a standstill. With no understanding of how the economic implications of Covid 19 would hit the property market, we all waited with baited breath to see what would happen.

The Great Recession, lasting from 2008 to 2009 hit businesses hard, and massively disrupted the property market; this resulted in less demand for property and a subsequent drop in prices. When people lose jobs and finances tighten, property is usually the first to take a hit as a slowdown of the market occurs. During the 2008-2009 recession, house prices dropped nearly 19%, giving people cause for concern during the current pandemic.

However, the strength of the property market this time around has taken everyone by surprise. The growth in the last 5 months has been the sharpest in any period since 2004, according to lender Halifax. This is heartening to hear, and inspires confidence in the industry based on current upward trends.

For the past 12 months, the average value of a British home has increased by more than £15,000 in this time period to reach £253,243, a record high. This gives comfort and alleviates fears of homeowners looking to sell their property, and landlords looking to purchase more.

To aid people buying properties and keeping the market alive, there has been a surge in the 90% mortgage.  The number of 90% mortgages has grown since the start of November, as lenders including TSB and Yorkshire Building Society returned to the market. Eleanor Williams, of MoneyFacts, said other lenders could follow suit and launch 90% deals in the coming weeks in order to compete.

Published: December 11, 2020