Annual house price growth accelerated to 11.2% in January, the highest level for the opening month of a year since 2005, the latest Nationwide House Price Index has revealed.
The figure is up from 10.4% in December, as prices also climbed by 0.8% on a monthly basis.
January also represented the sixth consecutive monthly increase, after taking account of seasonal effects, to take the average UK house price to £255,556.
Commenting on the figures, Nationwide chief economist, Robert Gardner, said that housing demand has “remained robust”.
“Mortgage approvals for house purchase have continued to run slightly above pre-pandemic levels, despite the surge in activity in 2021 as a result of the stamp duty holiday, which encouraged buyers to bring forward their transactions to avoid additional tax,” Gardner said.
“The total number of property transactions in 2021 was the highest since 2007 and around 25% higher than in 2019, before the pandemic struck. At the same time, the stock of homes on estate agents’ books has remained extremely low, which is contributing to the continued robust pace of house price growth.”
Nationwide also warned that the outlook for the housing market currently looks “uncertain” but anticipates that activity across the market will slow in 2022.
“House price growth has outstripped earnings growth by a wide margin since the pandemic struck and, as a result, housing affordability has become less favourable,” Gardner added.
“Reduced affordability is likely to exert a dampening impact on market activity and house price growth, especially since household finances are also coming under pressure from sharp increases in the cost of living.”
CEO of The Mortgage Lender, Peter Beaumont, added: “Borrowing costs are rising and banks are likely to tighten their lending criteria, leaving buyers high and dry if they cannot get past stricter mortgage affordability tests.
“However, there might be help on the horizon as the FCA considers encouraging lenders to ease affordability tests. And of course, rising wages my offset some of the effects of the cost of living rises we are seeing.
“Ultimately, the housing market needs to work together to provide alternative solutions for aspiring buyers, or it risks blocking out anyone with so much as a blemish on their credit record.”
Latest News
-
Tories pledge to scrap stamp duty on primary residencies
-
IMLA warns Chancellor not to hike taxes in housing market in Budget
-
Lloyds announces full acquisition of SPW
-
Three in five cash ISA savers would consider stocks and shares alternative
-
Quilter partners with eight new AR firms
-
FTB mortgage applications rise 9.3% in Q3
NEW BUILD IN FOCUS - NEW EPISODE OF THE MORTGAGE INSIDER PODCAST, OUT NOW
Figures from the National House-Building Council saw Q1 2025 register a 36% increase in new homes built across the UK compared with the same period last year, representing a striking development for the first-time buyer market. But with the higher cost of building, ongoing planning challenges and new and changing regulations, how sustainable is this growth? And what does it mean for brokers?
The role of the bridging market and technology usage in the industry
Content editor, Dan McGrath, sat down with chief operating officer at Black & White Bridging, Damien Druce, and head of development finance at Empire Global Finance, Pete Williams, to explore the role of the bridging sector, the role of AI across the industry and how the property market has fared in the Labour Government’s first year in office.
Does the North-South divide still exist in the UK housing market?
What do the most expensive parts of the country reveal about shifting demand? And why is the Manchester housing market now outperforming many southern counterparts?
In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance, to explore how regional trends are redefining the UK housing, mortgage and buy-to-let markets.
In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance, to explore how regional trends are redefining the UK housing, mortgage and buy-to-let markets.
The new episode of The Mortgage Insider podcast, out now
Regional housing markets now matter more than ever. While London and the Southeast still tend to dominate the headlines from a house price and affordability perspective, much of the growth in rental yields and buyer demand is coming from other parts of the UK.
In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance.
In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance.
© 2019 Perspective Publishing Privacy & Cookies
Recent Stories