November 2021 saw average house prices in the UK reach £270,708, a slight increase of 1.2% (£268,349) from the previous month, according to the latest figures.
As such house prices are now 16.6% up from pre-pandemic levels in November 2019 (£232,096), according to Land Registry data.
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “Despite the end of the Stamp Duty holiday in September and the start of the usual quieter period for the property market over winter, house prices continued to climb in November 2021.
“2021 was, without doubt, a roller coaster year for the property market; 2022 will most likely be more settled.
“Without the Stamp Duty holiday to push up demand at certain points of the year, we’d expect activity in the property market to normalise and for any increases in house prices to become more gradual. Plus the lack of housing stock is still a real issue, and will keep demand high.”
Karen Noye, mortgage expert at Quilter, added: “UK house price data for November shows that despite the drop in house prices seen in October, and being two months on from the withdrawal of the government’s stamp duty holiday scheme, the average house price rose to £271,000 in November. On a non-seasonally adjusted basis, the average UK house price increased by 1.2% between October and November 2021. Over the year to November, house prices grew by 10.0%.
“The Bank of England already hiked interest rates to 0.25% in December, and with this morning’s CPI data showing UK inflation continues to soar, reaching a 30 year high of 5.4%, a further rate hike could well be on the cards.
“If this were to be the case, homebuyers would likely be further put off and we could see a break in house price growth as a result. Alongside the inflated state of the housing market, mortgage rates would be pushed higher still, which would make buying a home even more unaffordable.
“We are currently at an interesting juncture. Headlines are reporting that the worst of the pandemic is behind us and life is likely to finally make a return to normality, particularly as the government is rumoured to soon change its Plan B rules and put office work back on the table.
“How such a change would translate into people actually returning to the office is yet to be seen, but if a shift were to take place then the race for space we have witnessed in recent times may well be halted and could help to finally stall house price growth – particularly if this were alongside an interest rate hike.
“While house price growth may eventually start to slow, at the moment the housing market is defying everyone’s expectations. Many had hoped that with the stamp duty holiday drawn to a close, the market would finally ease off and prices would start making their way back down to earth, yet this does not seem to be the case.
“Buying a home in these times will be out of reach for many, particularly as even if there were to be a slowing of growth, it would likely be very gradual.
“Those holding out hope for a dip in prices following the stamp duty holiday removal will be disappointed. Rising mortgage rates, alongside inflated house prices and the seemingly ever-increasing cost of living will make buying a new home even more challenging.”
