House prices surged by £16k on average in 2021 in ‘record year’ for the property market

Martin Roberts discusses the rise in house prices

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Annual house price growth rose by 7.1 percent this year, with the average property now having a value of £240,800 – the highest on record. Last year, the average home had a value of £224,800. Shockingly, five million homes across the country, which is around a fifth of the UK’s private housing stock saw their value increase by more than £35,000.

The value of the UK’s housing market increased by a whopping £670billion in 2021 and is now worth £9.5trillion.

Buyer demand remains high and is 15.7 percent higher than last year.

However, demand is currently outstripping supply with housing stock down by a shocking 33.2 percent.

This is creating heavy competition in the property market with bidding wars emerging in some parts of the country.

Levels of buyer demand are slowing down as the UK creeps towards the end of the year.

Homes being listed for sale have also slowed down in recent weeks.

However, some experts are predicting buyer demand will swell after Christmas in the Boxing Day “bounce”.

The sudden seasonal demand is usually down to people reassessing their homes over the Christmas period as they invite friends and family over to socialise.

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Some will realise they need an extra room while others may want more garden space.

The pandemic has also forced people to reconsider their living arrangements.

With more people working from home, some are now looking for home offices or an extra room to convert into a home gym, guest room or entertainment space.

Buyer demand has been highest in the East Midlands, West Midlands and Yorkshire.

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Increased buyer demand and depleted housing stock has ultimately led to accelerating house price growth.

Grainne Gilmore, Head of Research, Zoopla, said this year has been a “record year” for the property market.

She said: “This year has been a record year for the market, with the stamp duty holiday and the pandemic-led ‘search for space’ among homeowners resulting in the highest number of sales since before the financial crisis, with 1.5 million transactions.

“However such a busy market eroded the number of homes available to buy, as properties were being snapped up so quickly.

“This imbalance between demand and supply has put upwards pressure on prices.

“On average, home values are up £16,000 on the year.

“But our data shows that millions of homeowners have seen a larger uplift than this during the course of 2021.

”This uplift in equity may act as a spur for more households to consider a move in 2022, further boosting the seasonal post-Christmas bounce in activity that traditionally occurs before the New Year.”

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