House prices in UK hit £276,091 with annual growth at its highest for nearly 18 years, says Halifax
UK house prices rose for the sixth month in a row to hit their highest annual growth in nearly 18 years, according to the Halifax.
This means the average price for a property now stands at £276,091; an increase of more than £24,500 compared to December 2020. In cash terms, it is the strongest year-on-year cash rise since March 2003.
In percentage terms, annual house price inflation hit 9.8 per cent – its highest level since July 2007.
Russell Galley, managing director of the mortgage lender, said the housing market continued to “defy expectations” in 2021, with quarterly growth reaching 3.5 per cent in December.
“This is 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.”
Mr Galley cited a lack of spending opportunities during the various pandemic lockdowns, which meant people were able to save more.
“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.”
He added that the extension of the Government’s job and income support schemes, a lack of available homes for sale, and historically low mortgage rates, had all helped drive annual house price inflation to 9.8 per cent, its highest level since July 2007.
However, he said: “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.”
Halifax’s House Price Index showed that in December Wales was the strongest-performing nation or region in the UK, with annual house price inflation of 14.5 per cent, taking the average value of a home to £205,579.
Northern Ireland also performed well, again recording double-digit annual growth, of 10.6 per cent with an average house price of £170,946.
Scotland saw the price of an average property up 9.7 per cent year-on-year to £192,988 – the most expensive on record in the nation.
In England, the North West was the strongest performing region at 11.8 per cent, followed by the South West.
Despite registering a strong quarterly rise in prices of 2.9 per cent, up from 1.1 per cent in November, London remains by far the weakest performing area, with at 2.1 per cent year-on-year rise.