House prices in East Anglia grow by 6.4pc in 2020

File photo dated 14/10/14 of sold and for sale signs.

House prices enjoyed their fastest annual growth for six years in 2020 after ending the year 7.3% higher, Nationwide Building Society said. - Credit: PA

House prices enjoyed their strongest annual growth across the UK for six years in 2020 as prices in East Anglia jumped by 6.4pc, according to an index.

Nationwide Building Society said the average UK house price jumped 7.3pc this year to £230,920 after rising 0.8pc in December alone as the market was spurred on by tax breaks and changing demand amid the pandemic.

The report revealed that nationally prices have jumped 5.3pc since March, when the pandemic struck, after demand was sent surging by a stamp duty holiday and the shift to homeworking.

Nationwide said the stamp duty boost had brought forward Britons’ home-moving plans, while changing working patterns had increased demand for larger homes in less densely populated locations.

Robert Gardner, Nationwide’s chief economist, said: “The resilience seen in recent quarters seemed unlikely at the start of the pandemic.

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“Indeed, housing market activity almost ground to a complete halt during the first lockdown as the wider economy shrank by an unprecedented 26pc.

“But, since then, housing demand has been buoyed by a raft of policy measures and changing preferences in the wake of the pandemic.”

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However, he added that the outlook for the housing market remains “highly uncertain” as restrictions to control the virus tighten across the UK and with government support measures and the stamp duty holiday set to end in the spring.

He said: “Housing market activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March.”

Howard Archer, chief economist at the EY Item Club, also warned that the property market will see a reversal of fortunes in 2021 and could fall by around 5% by the end of next year.

He said: “The EY Item Club believes that the housing market is likely to come under mounting near-term pressure as the economy is hampered by pandemic-related restrictions, while there may well still be a significant rise in unemployment despite the furlough scheme being extended until April.”

The research found that England saw the highest growth among the home nations in 2020, with prices rising 6.9pc year on year in the fourth quarter.

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