UK home prices are growing at fastest pace since 2015 and defying COVID-19 fallout

London: UK house prices rose at the fastest pace in almost six years last month as the property market defied a wider economic slump. Values climbed 6.5 per cent from a year earlier to an average of 229,721 pounds ($307,000), Nationwide Building Society said.

They increased 0.9% from a month earlier. The report comes a day after Bank of England data showed mortgage approvals reached a 13-year high.

The housing market is booming in large part due to a government suspension of a tax on home purchases until the end of March and pent-up demand following a spring coronavirus lockdown that temporarily closed it down. While large swathes of the services sector were shuttered again by restrictions in November, real estate has been allowed to keep operating.

Won't have long to run

Even so, analysts say activity could slow next year as unemployment rises and state support comes to an end. "The outlook remains highly uncertain and will depend heavily on how the pandemic and the measures to contain it evolve," said Robert Gardner, Nationwide's chief economist. "Housing market activity is likely to slow in the coming quarters, perhaps sharply."