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Average UK house prices rise £27,000 in a year

  • 16/02/2022
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Average UK house prices rise £27,000 in a year
Average house prices in the UK were £275,000 in December, a new high and £27,000 up on the same period the year before.


According to the Office for National Statistics’ (ONS) latest house price index, average house prices in December rose by 10.8 per cent, which is slightly up from 10.7 per cent growth in November.

Wales reported the largest average house price growth at 13 per cent, reaching a record level of £205,000.

This was followed by Scotland, where house prices rose by 11.2 per cent over the year to December. This is slightly down from 12.1 per cent in November and the average house price in Scotland is now £180,000.

House prices in England rose by 10.7 per cent over the year, with average house prices also at a record high of £293,000.

Within England, the South West had the largest annual house price growth, where average prices rose by 13.6 per cent in the year to December, which is up from 12.8 per cent in November.

The lowest annual house price growth was in London, which came to 5.5 per cent in December, which is slightly up from 5.1 per cent in in November.

London is still the most expensive of any region in the UK with average house prices now £521,000.

Rising house prices raise concerns around affordability

Tomer Aboody, director of property lender MT Finance, said as property prices continued to increase, there was “danger that affordability is stretching beyond the means of many would-be buyers”.

He explained: “With inflation rising again to 5.5 per cent, and expectations that it could climb considerably further, the possibility of a further interest rate rise in March looks even more likely.

“The housing market is likely to continue to be busy into the spring as buyers fight for every house to make the most of cheap rates before they disappear. That said, we don’t expect a further increase to result in any major hike in mortgage pricing overnight.”

He said areas outside of London had seen the “most significant levels of growth” but said that as many were returning to the office it would be interesting to see whether those number could be impacted as the allure of London returns.

Mark Harris, chief executive of SPF Private Clients, said: “Despite the global pandemic, the housing market thrived last year and there are still those who have not yet made their purchases. Squeezed affordability, however, would be a major issue, preventing first-time buyers in particular from getting on the ladder.

“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.”

He noted that there was speculation that the Bank of England would raise interest rates again but it would remain to be seen what impact this may have on buyer confidence.

Stuart Law, chief executive of Assetz Group, said: “House prices are still on the rise while wages fail to keep pace with inflation. This is a dangerous dynamic for the market and particularly worrying for low income and first-time buyers.

“I expect interest rate growth to be cautious this year despite inflationary pressures, allowing low-cost mortgages to fuel market activity. But, this can’t continue indefinitely. If current dynamics persist, we will see more and more people locked out of the housing market unless we urgently tackle chronic undersupply.”

He added that it was waiting on updates on planning reform, which was a “huge barrier for housebuilders”, and key to ensure developers could navigate cost pressures by having access to a wide range of financial products, especially peer-to-peer lending and specialist finance.

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