According to this morning's data, house price growth hit 10% in November, raising the value of the average home in the UK to £271,000 - £25,000 higher than November 2020.
ONS revealed that average house prices increased over the year in England to £288,000 (9.8%), in Wales to £200,000 (12.1%), in Scotland to £183,000 (11.4%) and in Northern Ireland to £159,000 (10.7%). London continues to be the region with the lowest annual growth at 5.1%.
On a non-seasonally adjusted basis, average house prices in the UK increased by 1.2% between October and November 2021, compared with an increase of 1.0% in the same period a year ago.
On a seasonally adjusted basis, average house prices in the UK increased by 1.4% between October and November 2021, following a decrease of 1.5% in the previous month.
The South West was the region with the highest annual house price growth, with average prices increasing by 12.9% in the year to November 2021. This was up from 10.8% in October 2021. The lowest annual house price growth was in London, where average prices increased by 5.1% over the year to November 2021, down from 6.7% in October 2021.
Despite being the region with the lowest annual growth, London's average house prices remain the most expensive of any region in the UK at an average of £520,000 in November 2021.
The North-East continued to have the lowest average house price at £149,000, having surpassed its pre-economic downturn peak of July 2007 in December 2020
Emma Cox, Sales Director at Shawbrook Bank, comments: “A competitive market has become the red rag to bullish buyers. Rather than deterring prospective homeowners, a combination of higher asking prices and declining availability has left some estate agents with only a handful of properties to market. While sellers in hotspots such as London are well versed in such rapid market activity, this level of competition is something that a number of rural towns and cities could previously only have dreamt of.
“The harsh reality is that this extended period of ground-breaking house prices will provide challenges for the market as we move further into 2022. With inflation reaching 5% this year and the cost of living rising, it’s imperative that buyers don’t overstretch themselves in pursuit of their dream home. A mortgage is likely to be the most significant amount of debt an individual takes on, six-figure borrowing should not be entered into lightly. Securing a competitive, fixed-rate, mortgage deal ahead of any changes to interest rates could make a significant difference to your monthly outgoings.
“For property investors too, adding to your portfolio is a big financial step. It’s important to make sure any property you buy and mortgage you take on will cover you, should any refurbishments be needed or if there is a delay when you come to sell the property.”
Phillip Stevens, director of Richmond estate agency Antony Roberts, says: "It was business as usual in November as prices rose again following October’s dip which came about following the end of the stamp duty holiday. There is plenty of evidence that buyer demand remains strong, especially for houses, and with relatively little stock available it is a house seller's market.
"The interest rate rise does not appear to have dented buyers’ confidence thus far, nor their ability to purchase property, but with inflation at a 30-year high that could change as it may well be the first hike of many. Those wanting to make their move will be keen to do so sooner rather than later but whether they can depend on what stock launches onto the market this spring."
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: "There is further speculation that the Bank of England will raise interest rates by 0.5 per cent at its February meeting in order to counter rising inflation, and it remains to be seen what impact this will have on buyer confidence.
"Despite the global pandemic, the housing market was able to thrive last year and there are still those who have not yet made their purchase. Squeezed affordability would be an issue, preventing first-time buyers in particular from getting on the ladder, but the Bank will be mindful that as we come out of a pandemic, a succession of significant rate increases could be extremely damaging to the wider economy.
"Low mortgage rates have been one of the contributing factors to the housing boom and although some lenders are tweaking mortgage rates upwards on the back of higher money market rates, pricing remains competitive."
Sundeep Patel, Director of Sales at specialist lender, Together commented: “After a year where activity in the property market defied expectations, November’s house prices rose to 10%, ending 2021 with the average UK price at a huge £271,000.
“While the property market continues to boom, affordability remains a concern. Higher inflation and the cost-of-living crisis are putting a real squeeze on first-time buyers, making it difficult for them to save enough for a deposit. To add to the mix, demand for housing continues to heavily outstrip supply, again keeping house prices inflated.
“Although it is a seller’s market at the moment, there has been a rise in potential sellers requesting valuations of their homes, which may suggest that more properties will be made available for buyers in the short to medium term. This could eventually quell the recent surge in house price growth, offering first-time buyers and house movers an improved chance of snapping up affordable property.
“However, the market shows no sign of cooling in the first quarter of the year and we predict specialist lenders and brokers will continue to have a key role in supporting the evolving financial needs of borrowers who may not fit the mould of mainstream lenders.”
