Average house price hits new high increasing by £24k in a year – strongest rise since 2003
Martin Roberts discusses the rise in house prices
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The property market had a busy year last year, with many Britons moving home in search of more space. Despite the demand, the lack of properties on the market meant house prices increased, for eight months of the year in 2021. According to Halifax’s latest House Price Index, the housing market “defied” expectations last year.
Russell Galley, Managing Director, Halifax, said: “UK house prices climbed again in December for the sixth consecutive month in a row, up 1.1 percent.
“The average price for a property now stands at £276,091, an increase of more than £24,500 compared to December 2020, marking the strongest year-on-year cash rise since March 2003.
“The housing market defied expectations in 2021, with quarterly growth reaching 3.5 percent in December, a level not seen since November 2006.”
According to the expert, average house prices rose on eight occasions last year, despite the UK being in a lockdown for the first few months of the year.
Mr Galley added: “The lack of spending opportunities afforded to people while restrictions were in place helped boost houseplant cash reserves.
“This factor, alongside the Stamp Duty holiday and the race for space as a result of home working, will have encouraged buyers to bring forward home purchases they’d maybe planned for this year.
“The extension of the Government’s job and income support schemes also supported the labour market and may have given some households the confidence to proceed with purchases.
“A lack of available homes for sale, and historically low mortgage rates, have also helped drive annual house price inflation at 9.8 percent, its highest level since July 2007.”
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Mr Galley explained that looking ahead into 2022, house price growth could slow down considerably.
This is due to a number of different factors including tackling rising inflation.
The expert said: “Our expectation is that house prices will maintain their current strong levels, but that growth relative to the last two years will be at a slower pace.
“However, there are many variables which could push house prices either way, depending on how the pandemic continues to impact the economic environment.”
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Wales remains the strongest performing nation in the UK with annual house price inflation of 14.5 percent.
House prices also continue to rise in Scotland, with the average property up 9.7 percent year-on-year, with the average price of £192,988, the most expensive on record.
In England, the North West was the strongest performing region, followed by the South West.
London remains the weakest performing for annual inflation at 2.1 percent.
Guy Gittins, CEO of estate agency Chestertons, said: “As house hunters embraced the festive season, their search for a property was temporarily put on hold.
“As a result, December’s sales market saw a seasonal slowdown compared to November but still outperformed December 2020.
“Our figures show that new applicant numbers were up a staggering 20 percent in December last year.
“With buyer demand outstripping the number of available properties, sellers dictated December’s market which led to a 54 percent decrease in the number of sellers willing to drop their asking prices.
“Looking ahead, we predict the imbalance between supply and demand to remain, creating a continuously competitive market for house hunters.”
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