"Larger, typically more expensive, properties with more outdoor space became even more highly prized, which in turn increased the price of the average transaction."
This is the highest annual rate since April 2016 when prices were increasing by 8.4%.
Excluding London and the South East, prices rose by 8.9% over the year.
On average, house prices across England and Wales increased by 1.4% between November and December 2020.
Across Q4, e.surv says the South West 'confidently retained' its first place as the region with the highest house price growth at 10.9%, with areas within it such as Cornwall, Bournemouth, Bristol and Gloucestershire all experiencing price growth in excess of 15%.
The North West has moved up to second position, with growth of 9.0%, followed by the East Midlands at 7.4%.
All regions reported an increase in growth except for Greater London, where price increases have slowed by -0.1%.
Average house prices have now increased by 51% over the past ten years from £216,000 in December 2010 to £326,500 in December 2020. The movement in the CPIH price index over this same period is 19%, hence house prices in real terms have increased by 32% over the last ten years.
Richard Sexton, director at e.surv, commented: “During 2020, large numbers of people across the UK were confined to their houses for long periods of time, as we battled the pandemic. Over the year many people were forced to adapt their homes to function as offices, schools and nurseries. This increased emphasis on where we live and where we spend so much of our lives undoubtedly helped focus many people’s minds on the property market.
“This increased focus was reflected in the types of property that were most sought after in 2020. Larger, typically more expensive, properties with more outdoor space became even more highly prized, which in turn increased the price of the average transaction.
“Indeed, prices rose rapidly over much of England and Wales in 2020, with the average house price in December up 7.8% on the previous year. This is the highest annual increase since 2016, though it is worth noting that most of this growth took place in the last six months of the year as pent-up demand was released by more relaxed coronavirus restrictions.
“The market was further stimulated in July by the introduction of the Stamp Duty holiday, which is still set to last until the end of March 2021 and continues to fuel activity in the market.
“Taking a longer view, average house prices in England and Wales have increased 51% over the last decade. Even examining house price growth in the context of this time frame, though, 2020 still stands out.
“It’s important to remember that the pandemic which produced such an unusual year is very much still with us. Everyone involved in the property market must continue to operate in a responsible manner, making use of technology where possible to support the industry while putting safety first.”
