house prices

Halifax have reported that house prices have risen for the fifth consecutive month, with growth now at a 15-year high, and reaching record-breaking figures

House prices across the region

Across the nation, Wales remains by far the strongest performing region in the UK, with an annual house price inflation of 14.8%.

Buying a property in Wales has never been so expensive, with the average house price breaking through the £200,000 barrier for the first time in history.

Across the UK, Northern Ireland also continues to record double-digit annual growth, with an average house price of £169,348.

In Scotland, house prices also continue to rise, with the price of an average property selling for around £191,140 – their most expensive record – and inflation of 8.5%.

In England, the Northwest remains by far the strongest performing region, which is its highest rate of growth since 2005, and an average house price of £209,287.

London continues to fall behind the rest of the UK in its rate of house price growth, with annual inflation of just 1.1%, though this was up slightly from October. However, at an average of £521,129 properties in London continue to be much more expensive than in all other parts of the country.

Housing activity

HMRC monthly property transactions data shows that in the UK, home sales decreased in October 2021. UK seasonally adjusted residential transactions in October 2021 were 76,930 – down by 52.0% from September’s figure of 160,220.

The latest quarterly transactions from August to October 2021,  were approximately 14.2% lower than May to July 2021. Compared to last year, transactions were 28.3% lower than October 2020.

The latest Bank of England figures show the number of mortgages approved to finance house purchases fell for a fifth consecutive month in October 2021, by 6% to 67,199. This year, the October figure was 32% below October 2020.

House prices reach record heights

Russell Galley, managing director at Halifax, commented: “UK house prices rose again in November, with the value of the average property increasing by another 1%, or £2,808, tipping the annual rate of inflation up to 8.2%.

“This is the fifth straight month that average house prices have risen, with typical values up by almost £13,000 since June, and more than £20,000 since this time last year.

“On a rolling quarterly basis, the uptick in house prices was 3.4%, the strongest gain since the end of 2006, bringing the new average property price up to a record high of £272,992.

“Since the onset of the pandemic in March 2020, and the UK first entering lockdown, house prices have risen by £33,816, which equates to £1,691 per month.

“The performance of the market continues to be underpinned by a shortage of available properties, a strong labour market and keen competition amongst mortgage providers keeping rates close to historic lows. Those taking their first step onto the property ladder are also playing an important role in driving activity, with annual house price inflation for first-time buyers at 9.1% compared to 8.8% for home movers.

‘Race for space’ becoming less prominent’

Galley added: “We see this across different property types too, with double-digit annual price inflation for flats (+10.8%) over the last year compared to slower gains for detached properties (6.6%).

“This could suggest the ‘race for space’ is becoming less prominent than it was earlier in the pandemic, with industry data also showing the overall number of completed transactions has fallen back since the end of the Stamp Duty holiday.

“Looking ahead, there is now greater uncertainty than has been the case for quite some time, with interest rates expected to rise to guard against further increases in inflation.

“Economic confidence may be also be dented by the emergence of the new Omicron virus variant, though it remains far too early to speculate on any long-term impact, given insufficient data at this stage, not to mention the resilience the housing market has already shown in challenging circumstances.

“Leaving aside the direct impact of a possible resurgence in the pandemic for now, we would not expect the current level of house price growth to be sustained next year given that house price to income ratios are already historically high, and household budgets are only likely to come under greater pressure in the coming months.”


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