House prices in December were 9.8% higher than the same period in 2020, marking the largest year-over-year increase since March 2003, according to Halifax.
The latest Halifax House Price Index shows that the average UK house price in December was Â£ 276,091, an increase of Â£ 24,537 from the Â£ 251,554 recorded in December of last year.
Average prices rose 1.1% from November’s figure and have now risen for six consecutive months. Quarterly growth reached 3.5% in November, the largest increase since 2006.
Russell Galley, CEO of Halifax, said the housing market “has defied expectations in 2021”
He said: ‘In 2021 we have seen average house prices hit new records eight times, despite the UK being subject to a’ lockdown ‘for much of the first six months of the year. year.
âThe lack of spending options available to people while restrictions were in place helped increase household cash reserves. This factor, along with the stamp duty holidays and the space race due to working from home, will have encouraged buyers to move forward on home purchases they may have planned for this year.
Galley said any increase in interest rates to tackle rising inflation will significantly slow the market down in 2022.
This was picked up by Scott Clay, Head of Distribution Development at Lender Together. He said: âIt’s likely that 2022 will paint a different picture; We can expect the housing market to cool down with the latest interest rate hike, lingering concerns over the Omicron variant, high cost of living and overall economic uncertainty.
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Tom Bill, UK Residential Research Manager at Knight Frank, said if the Omicron variant was smoother than expected it could result in more properties coming to market, resulting in a downward pressure on prices.
He said: “Mortgage costs will rise as pressure increases on the Bank of England to raise rates and more sellers come forward as the prospect of further restrictions recedes, correcting the imbalance between an offer low and high demand which has led to gravity-defying prices growth in recent months.