The average price of a property in the Uk hit a new record high in December 2021 of £276,091 but house price growth is set to slow in 2022, according to Halifax.
It what will surely be a great late Xmas present for homeowners house prices Halifax revealed that prices for the year were up by 9.8% which is over £24,500.
However, the Hali warned that house price growth is expected to slow in 2022 as pressures mount on household budgets.
Russell Galley, managing director, Halifax, said: “UK house prices climbed again in December for the sixth month in a row, rising by 1.1%. 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% in December, a level not seen since November 2006. In 2021 we saw the average house price reach new record highs on eight occasions, despite the UK being subject to ‘lockdown’ for much of the first six months of the year.
“The lack of spending opportunities afforded to people while restrictions were in place helped boost household cash reserves. This factor, alongside the Stamp Duty holiday and the race for space as a result of homeworking, will have encouraged buyers to bring forward home purchases that may have been 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 to 9.8%, its highest level since July 2007.
“Looking ahead, the prospect that interest rates may rise further this year to tackle rising inflation, and increasing pressures on household budgets, suggests house price growth will slow considerably. 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.”
Regions and nations house prices
Wales remains by far the strongest performing nation or region in the UK with annual house price inflation of 14.5%, taking the average house price to £205,579.
However, the rate of increase is slightly down from the 14.8% rise recorded in November. Northern Ireland was also one of the strongest performing regions, again recording double-digit annual growth (10.6%, average house price of £170,946).
House prices also continue to rise in Scotland, with the average property now up 9.7% 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 (11.8%), followed by the South West.
Despite registering a strong quarterly rise in prices (2.9%), up from 1.1% in November, London remains by far the weakest performing area for annual inflation (2.1%).
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Even though the Bank of England finally made its move and increased interest rates in December, confidence in the housing market continued unabated to finish the year on an impressive high. Although the last month of the year tends to be quieter for the market as people wind down for Christmas, there was still plenty of interest in buying homes and more demand than supply pushed house prices up further still.
“Low mortgage rates have been one of the contributing factors to the housing boom and although some lenders are starting to tweak mortgage rates upwards, pricing remains competitive. There is still plenty of confidence among buyers but perhaps now is the time to secure a cheap fixed mortgage rate to protect against the potential of further rate rises.”
