House Price Watch Dec 2021
2021 has been an extraordinary year for the housing market. Transactions increased 30% on pre-pandemic levels and house prices rose 10.1% this year. Looking ahead, it seems inevitable the market will ease since the stamp duty holiday and pandemic likely brought forward people's plans to buy. With the pandemic still in play, rising inflation and interest rates expected to climb, we could see buyer demand soften. New seller inquiries are picking up, so buyer choice could improve. The result is likely to be a better balance of buyers to homes for sale in 2022 and modest house price growth of 3%.
What’s happening nationally
House prices are up on average +1.1% in the past month and +10.1% in the past year.
Indices based on:
Land Registry – registered property transactions in November
Nationwide & Halifax – mortgage valuations in December.
Rightmove – asking prices posted on Rightmove in December.
*Rightmove is not included in the index average as the basis for its index is different (asking price vs agreed sale price)
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House prices in your area
House prices have increased in most UK regions over the past month.
The highest rises over the past year have been in the South West (+12.9%), the East of England (12.3%) and Wales (+12.1%).
London has seen the slowest rise in house prices this year, but still up 5.1%.
Average house prices are highest in London and lowest in the North East.
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|Yorkshire and The Humber|
|East of England|
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November transactions were up 25% on October but down 16% on November last year.
It continues to be a seller’s market with average stock levels at their lowest in 2021.
Time to sell nudged up slightly in November.
How busy is the market?
- Not busy
- Very busy
- Transactions among lower range for a busy year
- Total transactions in November 96K
- +24% from last month
- -16% lower than November last year
Homes for sale vs homebuyers
- Good availability of homes
- Shortage of homes
- Buyer enquiries up (+13% RICS); buyer demand continues to rise
- Seller enquiries down (-18% RICS); eighth month in a row
- Average stock per agent 45; lowest stock of 2021 (incl under offer/ Sold STC Rightmove)
Average speed of sale
- 38 days to find a buyer up from 36 days last month (12 month average 48 days Rightmove)
What the experts say
“The kind of frenzied market we’ve seen in the last 18 months happens only a few times in most homeowners’ buying and selling lifetimes. While the pandemic is still having an ever-changing impact on society, we expect a housing market moving closer to normal during the course of 2022. A return to a less frenetic market due to more choice, and slightly higher interest rates, will suit many movers who have held back during the last 18 hectic months. With a jump in the number of owners requesting valuations from agents with a view to marketing their homes, it looks like this group are now gearing up to make it a new year resolution to move, so more buyer choice could now be on the cards. A rise in interest rates will help the return to more normality that will suit many movers. Buyer demand and market momentum remain strong going into 2022, with November showing buyer numbers 41% up on the election-subdued 2019, and still 3% up on booming 2020.”
“Prices are now 16% higher than before the pandemic struck in early 2020. Demand has remained strong in recent months, despite the end of the stamp duty holiday at the end of September. Mortgage approvals for house purchase have continued to run above pre-pandemic levels. In the first 11 months of 2021 the total number of property transactions was almost 30% higher than the same period of 2019. It appears likely the housing market will slow in 2022, since the stamp duty holiday encouraged many to bring forward their house purchase in order to avoid additional tax. Even if wider economic conditions remain resilient, higher interest rates are likely to exert a cooling influence.”
“The housing market defied expectations in 2021. We saw the average house price reach new record highs on eight occasions. The Stamp Duty holiday and the race for space as a result of homeworking, will have encouraged buyers to bring forward home purchases they’d maybe planned for this year. A lack of available homes for sale, and historically low mortgage rates, have also helped drive annual house price inflation to its highest level since July 2007. Looking ahead, the prospect that interest rates may rise further to tackle rising inflation and increasing pressures on household budgets suggest house price growth will slow considerably. Our expectation is house prices will maintain current levels, but growth will be at a slower pace.”
“After a busy start to 2022, the market will start to move back to pre-pandemic conditions, allowing supply pipelines to rebuild. However, the demand/supply imbalance will not fully unwind, and this will be one factor supporting price growth of 3% next year.”