U.K. Property Market Witnesses Its Strongest Year
U.K. home prices rose by nearly 7% in October, as strong demand and brisk sales puts the 2021 British housing market on track to have its busiest year since 2007, according to data from the Zoopla U.K. House Price Index Report. The average home price in the U.K. has now hit £240,000 (US$319,161), up from £200,000 in 2016, according to Zoopla. Between October 2020 and October 2021 alone, average U.K. prices increased by £15,500. By the end of the year, one in 16 homes will have changed hands, marking the U.K.’s busiest year for transactions since 2007. Last month, three northern cities in England saw the steepest annual growth in home prices, with Liverpool, Manchester and Sheffield seeing increases of 10.6%, 8.7% and 7.9%, respectively. Wales saw the highest regional rate of house price growth, at 10.8%. As is the case in housing markets across the globe, price increases in the U.K. are being driven by a combination of rising demand and shrinking inventory. U.K. demand in mid-October was 19% above the five-year average, according to Zoopla, while total stock of homes for sale was 40% below the five-year average. While these dynamics aren’t expected to dramatically shift in the new year, there are some indications that the market could become at least somewhat more hospitable for British buyers. Price growth has slowed slightly from August and September, and quarterly growth in October slowed to 1.2%, compared to 2.8% in July. Zoopla’s analysts forecast that an increase in inventory may ease up market dynamics as well, as a fresh wave of sellers is expected to list after the holiday season. “New supply will start to rise at the turn of the year as households use the holiday period to make a decision around making a move,” Zoopla head of research Gráinne Gilmore wrote in the report. “House price growth is starting to ease, although the path over the next year will not be linear. We expect U.K. average price growth to end 2022 firmly in positive territory at 3%.”
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