A bumper Christmas and New Year are on the way for landlords as house prices show no sign of falling after the boost of an extended stamp duty holiday.
Experts say the only thing holding the market back is a shortage of properties, as continuing demand from buyers stokes property prices.
According to property portal Zoopla, the value of British homes has hit a record £9.5 trillion and rising.
November saw prices increase by 7.1 per cent year-on-year, with around £16,000 added to the average home’s value during the past 12 months.
The portal’s research also found homes have gained in value by more than in 2019 and 2020 added together and that four regions – the South East, South West, East of England and the North East – have seen average values go up this year more than the last three years combined.
“This year has been a record year for the market, with the stamp duty holiday and the pandemic-led ‘search for space’ among homeowners resulting in the highest number of sales since before the financial crisis, with 1.5 million transactions,” said Zoopla head of research. Grainne Gilmore.
“However, such a busy market eroded the number of homes available to buy, as properties were being snapped up so quickly. This imbalance between demand and supply has put upwards pressure on prices. On average, home values are up £16,000 on the year, but our data shows that millions of homeowners have seen a larger uplift than this during 2021.
“This uplift in equity may act as a spur for more households to consider a move in 2022, further boosting the seasonal post-Christmas bounce in activity that traditionally occurs before the New Year.”
Estate agents across the country are running out of homes to sell.
Trade body the Royal Institution of Chartered Surveyors (RICS) says demand is picking up but has yet to translate into sales. Average stock levels on estate agents books have tumbled from 42 in October to 37 in November.
- 1 Strong buyer demand
- 2 London house prices hold back market
- 3 House prices by region – October 2021
- 4 House price history for your neighbourhood
- 5 House Price Digest FAQ
“The lack of supply available on the market is not only holding back sales momentum, but it also a significant factor behind house price growth sustained at a strong rate,” says the latest market report from RICS.
Data from another property portal – Rightmove – shows a modest dip in asking prices in the approach to Christmas, with homes listed for around £2,230 cheaper,
Britain’s biggest online property marketplace expects a ‘more normal’ year after a hectic 18 months.
“While fully available stock for sale has hit a record low, valuation requests from homeowners are 19% up on a year ago, suggesting more people will be making a New Year resolution to move,” said Rightmove’s house price index.
”Strong buyer demand is carrying forward into 2022, with November showing buyer numbers 41% up on election-subdued 2019, and still 3% up on booming 2020
“With two months of data yet to be reported, 2021 has already seen the highest level of completed home sales since 2007, and Rightmove expects 1.5 million for the full year.
“Seven out of 10 properties advertised on Rightmove are currently marked as sold subject to contract, compared to just two out of ten back in 2012, underpinning our prediction of a further 5% price rise in 2022.”
House price data from the Office for National Statistics (ONS) tallies with research by the trade.
The latest ONS research says house prices increased 10.2 per cent year-on-year to October.
The average house price is now £268,000 – adding £24,000 to the same home’s value a year ago but falling from a high of £271,368 in September.
Average house prices in England increased over the year to £285,000 (Up 9.8 per cent). In Wales, the figure was £203,000 (Up 15.5 per cent) and £181,000 (Up 11.3 per cent) in Scotland.
London is the region with the lowest annual growth at 6.2 per cent but the highest average house price of £516,285. The lowest average house price is in the North-East, at £147,719.
The ONS says house prices have gained the most this year in the East Midlands – a rise of 11.7 per cent – a decrease of 2.5 per cent from September’s figure of 14.2 per cent.
The rate of increase in London more than doubled from 2.8 per cent in September to 6.2 per cent in October. However, the capital is still posting the country’s lowest price rise.
Use this interactive map to assess how your property investments have performed over time. Input the town name, and the map does the rest.
Source: ONS and Land Registry
The figures for average house prices and movements in property values can be confusing if you don’t know how to read the data.
Here are some of the most asked questions about house price indices.
The reports use different data to draw their conclusions and take the data from different periods.
The Nationwide and Halifax base their indices on customer data, which are much smaller samples than the national data analysed by the ONS.
Acadata’s methodology includes analysis that no other index uses.
Each organisation collects data over different periods, making a direct comparison difficult.
There’s no such thing as an average home. The figure is simply maths calculated from the total value of all transactions in the sample divided by the number of homes changing hands.
All have flaws because of the restricted data, but the one with the broadest sample comes from the ONS. Unfortunately, the ONS data is usually the last to market and out of date by two to three months on publication.