UK house price growth hit a five-year high in October, despite the wider economy losing steam.
According to data released on Friday from Nationwide, the average property sold for £227,826 ($294,031) in October, up 0.8% month-on-month and 5.8% year-on-year — the biggest leap since January 2015.
“Data suggests that the economic recovery has lost momentum in recent months with economic growth slowing sharply to 2.1% in August,” said Nationwide chief economist Robert Gardner.
“Nevertheless, housing market activity has remained robust. Mortgage approvals for house purchase climbed to 91,500 in September – the highest level since 2007.”
The data is the latest sign of Britain’s property market boom rumbling on despite rising infection rates and restrictions.
Gardner said a stamp duty holiday in England and Northern Ireland would continue fuelling the market in the "near-term," as well as behavioural shifts sparked by COVID-19. A Nationwide survey last month found one in 10 people reporting they were moving because of their experiences during the pandemic.
Figures from property listings site Zoopla this week also showed strong continued growth in the market, with 140,000 more sales currently being processed than a year ago. Asking prices on Zoopla-listed properties were up 3% on a year ago, the highest growth rate since 2018.
Meanwhile rival site Rightmove (RMV.L) said earlier this month both sales and asking prices had hit a record high in September, with transactions up 70% and prices surging 5.5% year-on-year.
But some estate agents and experts say there are signs of momentum easing and expect much more pressure on prices soon from increasing coronavirus restrictions, unemployment, and mortgage interest rates.
"Lenders have grown increasingly conservative over the past two months with the result that first time buyers are struggling to secure finance,” said David Westgate, group chief executive at Andrews Property Group. “Mortgage providers are reading the macroeconomic runes and are not liking what they're saying.”
Richard Donnell, director of research and insight at Zoopla, told Yahoo Finance UK: “Housing market conditions are very similar to the period immediately after the global financial crisis with more movement amongst older, wealthier households and fewer moves amongst those who are less well off who are more dependent upon mortgages and sensitive to economic uncertainty.”
The partial stamp duty holiday in England and Northern Ireland also runs out at the end of March, with the current rush to buy before the deadline expected to be followed by a sharp decline in demand. Hundreds of thousands of buyers could even miss out because of delays processing surging sales, according to one recent report.
"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," said Gardner.
WATCH: What stamp duty cuts mean for the market this year and in future