UK average house prices hit a new record high of £ 272,992 in November, according to the latest Halifax index.
That means a monthly change of 1% – the fifth consecutive month of house price increases – and an annual growth rate of 8.2%.
Halifax also notes that the quarterly change – up 3.4% – is the highest observed since the end of 2006.
In Wales in particular, annual growth reached 14.8%, leading the average house price in the country to exceed £ 200,000 for the first time.
And Scotland has also seen significant annual growth. Here, the average house price rose 8.5%, bringing the average house price to £ 191,140 – also a new record high.
The report says that since March 2020, which it sees as the start of the pandemic, house prices have risen by £ 1,691 per month on average, a total of £ 33.81 so far.
Halifax Managing Director Russell Galley says a shortage of inventory is driving the market, with “a strong job market and stiff competition among mortgage providers keeping rates historically low.”
He also underlines that for first-time buyers, house prices increased by 9.1% over the year against 8.8% for movers.
“We’re also seeing it in different types of properties,” he says, “with double-digit annual price inflation for apartments (10.8%) over the last year compared to slower gains for apartments. individual properties (6.6%).
This could suggest that the ‘space race’ is less and less important than it was earlier in the pandemic, with industry data also showing that the total number of completed transactions has since declined. the end of the stamp duty holiday. “
Speaking of higher fixed prices than houses, Sarah Coles, Personal Finance Analyst at Hargreaves Lansdown, said, “There are some forces at play here. The “fear of missing out” plays its role.
She explains, “Once prices start to rise rapidly, anyone trying to access the real estate ladder starts to feel that unless they buy soon, prices will rise beyond the reach of their deposit. This means that they seek help, both from government programs like the Lifetime ISA and Equity Loan Purchase Assistance, and from their families.
“Mom and Dad’s bank has seen the value of their own home rise, so they’re more comfortable dipping into equity in order to find a deposit for their offspring.
“And once they have the deposit in place, the lowest mortgage deals are a major draw, as newbies can set rates so low that it makes their monthly payments manageable.”
Coles continues: “But it’s not just newbies. Some of these small properties are likely to be second homes and rentals.
This is a view shared by UK Finance, which said yesterday that an increasing amount of capital withdrawn peaked in June 2021 – at the same time when home buying activity was at its highest.
The maximum amount withdrawn – £ 106,000 – “together with the timing of this peak strongly suggests that a large part of this amount was indeed used to finance or partially finance additional property purchases,” comments UK Finance.
Karen Noye, Mortgage Expert for Quilter, said: “At this point, two months after the stamp duty holiday was taken out, there was hope that we could finally see a drop in house prices.
“The still rising prices demonstrate that while the program had an impact on house prices, it was not the only driver. The space race still seems to be strong and, combined with the current demand exceeding supply, prices are always being pushed up.
“Interest rates will be key over the next few months, and an increase would push mortgage rates up, likely discouraging potential buyers. However, the new Omicron variant may have put the brakes on any major changes planned by the Bank of England, meaning rates are unlikely to rise just yet.
“While it may be the case, the lowest mortgage rates are likely to go up while an interest rate hike is still expected, it’s just a matter of when.
“Those who wait for the housing market to boom in the hope of lower prices will probably have to wait a little longer.
“Whether or not house prices start to fall, the likely increase in mortgage rates will further contribute to the affordability of homeownership. “