House prices grew by 7.1% in November meaning the average house has gained around £16,000 in value over the last 12 months, according to the latest figures from Zoopla.
That increase has seen the value of UK housing stock hit a stonking £9.5trn and in most regions prices have grown by more than 2019 and 2020 combined.
London is one of the few exceptions, with prices up 2.4% over the last year. However, the average price in the capital remains far higher: £497,800, compared to £240,900 for the UK as a whole.
Surging house prices are being driven by a boom in movers but a shortfall in supply. Buyer demand was up 16% in November compared to a year earlier but the stock of houses on the market was down 9.5%.
Grainne Gilmore, head of research at Zoopla, 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.”
Peter Beaumont, CEO of The Mortgage Lender, added: “The housing market has withstood economic volatility throughout the year, with buyer demand remaining strong and house price growth climbing steadily.
“But the Bank of England’s decision last week to raise the base rate to 0.25% is likely to stir the pot. Already, we’ve seen the likes of Santander, Nationwide and NatWest announcing a mortgage rate hike in response. Prospective buyers who missed the window of opportunity to lock down a cheap fixed-rate mortgage, or homeowners looking to re-mortgage, may now be feeling concerned.
“However, good deals remain on the market so it’s important that buyers shop around to secure the best mortgage to suit them, and especially if interest rates rise further in 2022 to help curb inflation. The impact of the Omicron variant on the wider economy is unclear, but it could only delay likely further rate hikes. In the longer-term, more flexible, affordable mortgage options are needed to support buyers, regardless of economic trends.”
