U.K. Home-Price Gauge at 18-Year High Amid Post-Lockdown Boom

(Bloomberg) — A closely watched gauge of U.K. house-price growth surged to the highest in almost two decades last month amid a post-lockdown property boom.

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Residential houses stand in Frome, U.K., on Wednesday, Oct. 7, 2020. U.K. house prices rose at their strongest annual pace since 2016 last month as Britons’ changing work patterns and a tax reduction on purchases fanned a resurgence.

The Royal Institution of Chartered Surveyors’ measure of price movements over the past three months climbed to the highest since 2002 in September. New listings, inquiries and agreed sales all posted gains.

However, its survey found real estate agents expect a bleaker picture in the longer term. The recent winding down of the government’s furlough program is widely anticipated to push unemployment up, and the end of a temporary cut in tax on home purchases may weigh heavily on activity.

“There is increasing concern that the combination of significant job losses over the coming month allied to the scaling back of policy initiatives in early 2021 will have an adverse impact,” said RICS Chief Economist Simon Rubinsohn.

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Prime Minister Boris Johnson signaled more support for the market this week, with a promise of more generous home loans for millions of first-time buyers. Yet the market is also vulnerable to more virus restrictions as infections start to rise again.

For young Britons, housing insecurity is already rising. According to a separate report by the Resolution Foundation, one in seven people under 30 have missed a rent or mortgage payment since the Covid-19 pandemic began and are risking eviction.

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