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U.K. Home Prices to Drop as Much as 5% Next Year, Halifax Says

Residential houses in Frome, U.K.

Residential houses in Frome, U.K.

Photographer: Jason Alden/Bloomberg

U.K. home prices could slump as much as 5% next year as unemployment rises and government incentives end, according to mortgage lender Halifax.

House prices surged the most since 2016 this year as demand for more space, state support for wages and a temporary reduction in a property transaction tax offset the economic damage from the Covid-19 pandemic. That won’t last, Halifax said Monday.