Key drivers in the housing market in 2021 were a continuing desire for homes with more indoor and outdoor space, a mismatch in supply and demand, and the temporary cut in Stamp Duty. The resulting property boom, which according to Zoopla culminated in 1.5 million homes having changed hands last year, also saw UK house prices rise to record highs, with the average UK property hitting a high of over £270,000.1
Housing market activity strong towards the end of 2021
According to the latest figures from Halifax, house prices rose by 0.9% in October, taking the annual growth figure to 8.1%, up from 7.4% in the previous month. Significant regional variations continue to be seen; in England, the North West was the strongest performing region with annual growth
of 10.4% and an average house price of £205,881; London has remained the weakest performing area of the UK, although with an average property price of £514,907, values in the capital remain well ahead of other parts of the country. House prices also continued to rise in Scotland, with the average property costing £190,023 and growth of 8.6% year-on-year.
One estate agent2 has predicted that house prices will increase by 7% in 2022 in a ‘best case’ scenario, though it also made a ‘downside’ prediction of 2% growth. However, it remains to be seen how much any increases in Bank Rate will affect the market. Robert Gardner, Nationwide’s Chief Economist, thinks that Bank Rate increases will have minimal impact now that most mortgages are on fixed rates.
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