UK House Price Boom Predicted To End
UK house prices rose by 9.8% last year, the fastest rate since 2007, but the boom is predicted to end this year as household finances come under increasing pressure, according to Halifax. The price of the average UK home hit a record high of £276,091 in December, up more than £24,000 over the year, the biggest annual increase since 2003. Halifax said the housing market “defied expectations” last year, ending with a 3.5% increase in prices in December, a level not seen since the end of 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,” said Russell Galley, the managing director of Halifax. Factors that have helped fuel the home buying boom include the government’s stamp duty holiday, which came to an end in England and Northern Ireland in September after finishing earlier in Scotland and Wales, historically low-interest rates and the “race for space” sparked by the pandemic-fuelled shift to remote and flexible working. Halifax expects UK house price growth to slow considerably compared with the red-hot rates of the past two years of the pandemic. “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,” Galley said. “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.” Wales had the fastest house price growth in the UK over a calendar year, 14.5%, to £205,579. Northern Ireland also performed strongly, with prices rising 10.6% to an average of £170,946. House prices also continued to rise in Scotland, up 9.7% to £192,988, the most expensive on record. In England, the north-west was the strongest performing region, up 11.8% to £211,954, followed by the south-west, where prices climbed 11% to £287,774. “The demand for housing continues to outstrip supply, which is underpinning house prices,” said Jan Crosby, the UK head of infrastructure, building and construction at KPMG. “Developers can’t build quickly enough to sell into the strong market – particularly for family housing with outdoor space.”
Tags : INTERNATIONAL Stamp Duty Scotland England KPMG Wales Halifax Northern Ireland Family Housing UK House Price