According to the Nationwide building society, the average selling price of houses in the UK hit a record £254,822 this month, up more than 10% on the same month last year and the biggest price increase since 2006.
Demand has remained surprisingly strong in the final quarter of the year following the tapering of the stamp duty holiday at the end of September, with average prices now 16% above pre-pandemic levels.
PROPERTY SHORTAGE
At the same time, property portal Rightmove (RMV) reported the average price of houses coming to the market across the UK also hit a record in December, capping what the company called a ‘hectic’ period for the sector.
The average asking price of £340,167 compared with just over £317,000 at the start of the year, reflecting the extreme tightness of the market.
Nationwide flagged the ‘extremely low’ level of houses coming to market this year, while Rightmove reported the lowest ever level of property for sale on its website per estate agency branch with just 14 homes against 28 this time last year and with seven out of 10 properties on its site marked as sold subject to contract.
Encouragingly, Rightmove said valuation requests from homeowners were up 19% this month compared with last December, suggesting more people are looking to move in the New Year, helping to ease the shortage.
PRICE RISES TO MODERATE
The jump in prices hasn’t deterred buyers, with 40% more people registering on the Rightmove website in November compared with the same month in 2019, and the firm believes a better balance of supply and demand could encourage yet more people to consider moving.
Rightmove’s director of property data Tim Bannister commented: ‘A return to a less frenetic market due to more choice, and forecast slightly higher interest rates, will suit many movers who have held back during the last 18 hectic months.’
With more owners requesting valuations from agents with a view to selling their homes, ‘it looks like many of 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’ said Bannister.
While interest rates have risen slightly this year and are likely to move higher next year, the company is forecasting a 5% rise in average asking prices for 2022.
REGIONAL STRENGTH
According to Nationwide, on a regional basis the strongest-performing area this year was Wales, for the first time, followed by the South West which saw the strongest gains since 2004.
The best-performing regions in the Rightmove survey were the East and West Midlands, followed by the South West and South East. Both surveys showed prices in London rising by the least as buyers looked further afield thanks to a wider take-up of remote working.
Housebuilders Barratt Developments (BDEV) and Taylor Wimpey (TW.) inched higher on the report, while estate agents Foxtons (FOXT) and Savills (SVS) edged lower.
