The latest ONS House Price Index for December 2020 has revealed that the year ended on a high.

In the year to December, prices grew by 8.5% up from the 7.1% annual increase in November. This is the largest annual increase since October 2014, and means in the past year the average price has grown by £20,000 to £251,500.

In England house prices rose 1.5% between November and December 2020 and by 8.5% annually taking the average property value to £269,150.

However, in London house prices fell 1.1% during the final quarter of 2020 and rose 3.5% annually taking the average property value to £496,066.

Nitesh Patel, strategic economist at the Yorkshire Building Society, said: “Whilst some of the rise has been stimulated by the stamp duty holiday bringing forward demand, the pandemic may have also caused house buyers to reassess their housing preferences. In our UK HPI data, we have seen the average price of detached properties increase by 10.0% in the year to December 2020, in comparison with flats and maisonettes increasing by 5.0% over the same period.

“With the end of the stamp duty holiday looming and pent-up demand for moving home tapering off, we’re likely to see activity cool. This could be further exacerbated by the furlough scheme ending on 30 April, which could see a rise in unemployment.

“However, although unemployment remains the main downside risk, there are tentative signs demand is still strong. Internet searches on property portals still higher than before the pandemic and typically, many middle and higher income households have seen an improvement in their finances improve since last March.

“The continued re-evaluation of their housing needs could still drive demand at the middle and top end of the market. Although things may slow a little, provided that first-time buyers are still supported on to the ladder, we would expect to see reasonable levels of activity this year.”