The number of transactions fell off a cliff after the end of the stamp duty holiday, but a dearth of supply continues to push prices upwards.
With sales hitting a ten year high in September, it came as no surprise that they slumped to a ten year low in October. Some commentators expected a levelling off in prices, but Nationwide's figures showed a 0.7% increase. Now that has been followed up with a further 0.9% in November, taking the one year growth to 10%.
One in sixteen homes has changed hands in the last year and healthy levels of new mortgage approvals suggest that the appetite to move is still strong.
Whilst the demand is certainly there, the lack of supply remains constrained, putting upward pressure on prices.
As inflation begins to bite, a continued lack of supply in the market will translate into higher property values. While this is great for existing property owners, it will exacerbate the issues first-time buyers have experienced in getting on the ladder.
Nationwide's numbers for November
Underlying activity appears to be holding up well. The number of mortgages approved for house purchases in October was still running above the 2019 monthly average. Early indications also suggest that labour market conditions remain robust, despite the furlough scheme finishing at the end of September. If this is maintained, housing market conditions may remain fairly buoyant in the coming months.
Zoopla/Hometrack's top 5 cities
Among the UK’s largest cities, Liverpool, Manchester and Sheffield continue to show the highest rates of growth. The only large city registering price falls is Aberdeen, where average values edged down 0.2% on the year.