UK house prices continue to surge - Halifax
By Abigail Townsend
Date: Tuesday 07 Dec 2021
(Sharecast News) - UK house price growth has hit a 15-year high, industry research showed on Tuesday, fuelled by strong demand and a shortage of properties.
According to the latest Halifax house price index, the value of an average property increased 1% in November, or by £2,808, to £272,992. Consensus had been for an increase of 0.6%. November is now the fifth consecutive month that house prices have risen.
The annual rate of inflation is now 8.2%, while on a rolling quarterly basis, the uptick was 3.4%, the strongest gain since the end of 2006.
The UK housing market was shuttered during the first pandemic but since then has boomed, boosted by record low interest rates, a surge in demand for different property types, a shortage of properties coming to market, and the stamp duty holiday. Halifax said that since March 2020, house prices have risen by £33,816 or £1,691 per month.
Some analysts had expected inflation to ease after stamp duty reverted to its traditional threshold at the end of September.
But Russell Galley, managing director at Halifax, said: "The market continues to be underpinned by a shortage of available properties, a strong labour market and keen competition among mortgage providers keeping rates close to historic lows.
"Those taking their fest 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."
Looking ahead, however, and Galley conceded that the pace of growth was unlikely to continue next year.
"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," he said. "Economic confidence may be also dented by the emergence of the new Omicron variant, though it remains far too early to speculate on any long-term impact.
"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 cone under greater pressure in the coming months."
Wales was the strongest performing part of the UK, with the nation seeing house price inflation of 14.8%, which pushed the average property price past £200,000 for the first time. In contrast, London continues to lag the rest of the UK, with annual house price inflation of 1.1%. However, it remains more expensive than all other parts of the UK.
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