UK House Prices Have Surged to a Record High

According to Nationwide Building Society, the average price of a UK property has surged to a record high of £254,822. House prices underwent the fastest growth since 2006, growing by nearly 10% in 2021.

uk house prices surge

Different Growth for Different Regions

Whist the average UK house price rose by 10.4% (£23,902) from December 2020 to December 2021, this varied according to the region. Wales experienced the highest level of growth during the calendar year, with its average house prices rising 15.8%. Nationwide stated that this was the first time that Wales had topped the list since the building society began producing regional data nearly 50 years ago.

Northern Ireland recorded an annual price rise of 12.1%, whilst England recorded an annual price rise of 11.5%. Finally, the average house price in Scotland rose by 10.1% during 2021. The lowest growth figure that Nationwide recorded was in London. The average house price in the capital grew by 4.1%. Interestingly, London was the only region that experienced a lower annual price growth than it did in 2020 (6.2%).

Will This Growth Continue?

Robert Gardner, Nationwide’s chief economist, commented: “Demand has remained strong in recent months, despite the end of the stamp duty holiday at the end of September. The stock of homes on the market has remained extremely low throughout the year, which has contributed to the robust pace of price growth.”

However, he does predict that the growth of the UK housing market will stabilise next year: “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.”

He adds: “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.”

Mortgage Lending Statistics

According to UK Finance’s latest quarterly report, 2021 was similarly the strongest year for mortgage lending for nearly 15 years. It is estimated that £316 billion worth of home loans were handed out, the highest amount since 2007 when the figure reached £357 billion. The trade body estimate that this figure will drop to £281 billion in 2022, before increasing to £313 billion in 2023.

What Do Rising House Prices Mean for Your Mortgage?

Rising house prices are miserable news for those struggling to get onto the property ladder. You must pay a higher deposit, borrow more, and pay back more. However, if you have a mortgage, an increase in the value of the property can be an opportunity to access your equity rather than be forced to sell it. Clearly, this is only necessary if you are struggling with mortgage payments.

In this case, you have the option to remortgage your house and borrow against it. For instance, if your house’s value has gone up from £400,000 to £450,000, you could remortgage it for a higher amount. Even if you still owe £200,000, you could make use of your increase in equity by taking out a new, larger mortgage worth £250,000. This would give you an extra £50,000 in cash!

At HMS, we have extensive knowledge of the UK housing market and years of experience in navigating it.

If you are currently facing eviction or struggling with monthly mortgage payments, contact us immediately so that we can help stop the repossession of your home. Our experienced team at HMS is dedicated to finding a solution to your problem. Click here to get started or call 0808 109 3559 for free advice.