According to the latest Office for National Statistics house price index, average house prices in November came to £271,000, which is £25,000 more than November last year.
Previous reports showed that annual house price growth has only broached 10 per cent on three other occasions last year. In June 2021 annual house price growth was 13.5 per cent, in August annual house price growth was 10.3 per cent and in September it was 12.7 per cent.
Wales reported the strongest average house price growth at 12.1 per cent, with the average house price in the region pegged at £200,000. This is down from 14.4 per cent in October.
Scotland’s house price growth was 11.4 per cent and the average house price was estimated at a record level of £183,000. This is slightly up from 11 per cent in October.
Northern Ireland’s house price growth was 10.7 per cent and average house prices came to £159,000. This is the cheapest place in the UK to purchase property.
Within England, the South West had the highest annual house price growth with average prices growing by 12.9 per cent in November, which is up from 10.8 per cent in October.
London had the lowest annual growth at 5.1 per cent, which is a decrease from 6.7 per cent in October. It still remains the most expensive place to purchase property in the UK
End of stamp duty hasn’t dampened demand
Kevin Roberts, director at Legal & General Mortgage Club, said that the figures showed that the end of the stamp duty holiday in September had not dampened demand in the housing market.
He explained: “Buyers are still being influenced by mortgage rates that remain low, but also the ongoing impact of the Covid-19 crisis. Many are continuing to take the opportunity to move, whether it’s to find larger properties, or those with home office space or a garden.”
He added that despite high demand levels and little change in housing supply the trajectory of the housing market in 2022 was hard to predict.
Roberts said: “Growing inflation and potential further base rate rises in the near future, mean the landscape is looking increasingly complex. Many borrowers could benefit from speaking to an adviser, who will be able to help them navigate the year ahead.
“Doing so could help them find a new deal on their mortgage, particularly if their fixed rate is due to end soon and ensure their mortgage repayments remain fixed for the near future.”
Tomer Aboody, director of property lender MT Finance, said that the increase in house prices in November came off the back of cheap mortgage rates, return of high loan to value mortgages and impact of changing working habits meaning demand for space has grown.
He said: “Trying to manage this continued surge in prices, which is in danger of stretching beyond the means of many would-be buyers, will be on the government’s mind, along with rising inflation. Higher interest rates are a certainty in order to manage this.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, agreed that higher interest rates could be on the horizon, noting that there was further speculation that Bank of England will raise interest rates by 0.5 per cent at its February meeting.
He said that this would counter rising inflation, but it remained to be seen what impact this would have on buyer confidence.
Harris explained: “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.”