UK house prices rose over 10 per cent in 2021
UK house prices ended the year at a record high, according to Nationwide, with the price of a typical home now £254,822.
This represented double-digit annual price growth (10.4%), or £24,000 on an average property.
The building society said that 2021 was the strongest year for house price growth since 2006.
Robert Gardner, Nationwide’s chief economist, said: “Demand has remained strong in recent months, despite the end of the stamp duty holiday at the end of September. Mortgage approvals for house purchase have continued to run above pre-pandemic levels, despite the surge in activity seen earlier in the year.
“Indeed, in the first 11 months of 2021 the total number of property transactions was almost 30% higher than over the same period of 2019.
“At the same time, the stock of homes on the market has remained extremely low throughout the year, which has contributed to the robust pace of price growth.”
Wales ended the year as the strongest performing region, with house prices up 15.8% year-on-year. Price growth remained elevated in Northern Ireland at 12.1%, and Scotland saw a 10.1% rise.
In England prices rose by 9%. The South West was the strongest performing English region, with annual price growth of 11.5%, closely followed by the Outer South East, which saw annual price growth increase to 11.3%.
The North West saw the strongest growth of the regions in northern England, with annual price growth of 11.2%.
London was again the weakest performer, with annual growth remaining at 4.2%.
What will happen in 2022?
“It appears likely that the housing market will slow next year, since the stamp duty holiday encouraged many to bring forward their house purchase in order to avoid additional tax,” Gardner said.
“The Omicron variant could reinforce the slowdown if it leads to a weaker labour market. Even if wider economic conditions remain resilient, higher interest rates are likely to exert a cooling influence. Indeed, house price growth has outpaced income growth by a significant margin over the past 18 months and, as a result, housing affordability is already less favourable than before the pandemic struck.
“However, the outlook remains extremely uncertain. The strength of the market surprised in 2021 and could do so again in the year ahead.”