Monday, 23 May 2022

Average house prices hit record high

HOUSE prices in the UK rose by 10.4 per cent in December, according to mortgage lender Nationwide.

The average house is now valued at a record high of £254,822, which is £23,902 more than it was a year ago. House prices are now 16 per cent higher than before the pandemic began in early 2020.

Mortgage approvals for house purchases have continued to run above pre-pandemic levels. Meanwhile, the stock of homes on the market has remained at a low level, which has contributed to the pace of price growth.

Nationwide’s chief economist, Robert Gardner, said that the market is likely to slow down in 2022 due to a number of factors. These include rising interest rates, the end of the
Stamp Duty holiday, and high rates of covid infections.

Mr Gardner said: “It appears likely that the housing market will slow next year, since the stamp duty holiday encouraged many to bring forward their house purchase in order to avoid additional tax. The Omicron variant could reinforce the slowdown if it leads to a weaker labour market.

“Even if wider economic conditions remain resilient, higher interest rates are likely to exert a cooling influence. Indeed, house price growth has outpaced income growth by a significant margin over the past 18 months and, as a result, housing affordability is already less favourable than before the pandemic struck.

“However, the outlook remains extremely uncertain. The strength of the market surprised in 2021 and could do so again in the year ahead. The market still has significant momentum and shifts in housing preferences as a result of the pandemic could continue to support activity and price growth. Indeed, the Omicron variant could serve to reinforce the shift in preferences in the near term.”

Property

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