Housing market records strongest January growth in 17 years

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.”

    Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


Helping the credit challenged get mortgage ready
A rising number of borrowers are finding it harder to access mortgages due to being credit challenged - whether that’s from historic debts, a county court judgment, or having little to no credit history.

In the latest episode of the Mortgage Insider podcast, Phil Spencer is joined by Eloise Hall, Head of National Accounts at Kensington Mortgages, and Alastair Douglas, CEO of TotallyMoney.


Inside the world of high net worth lending
The mortgage market continues to evolve, and so too does the answer to the question: what is a high net worth individual in today’s market? In this episode of the Mortgage Insider podcast, host Phil Spencer is joined by Stephen Moroukian, Head of Product and Proposition for Real Estate Financing at Barclays Private Bank, and Islay Robinson, founder and CEO of Enness Global. Together, they explore what brokers really need to know when supporting high net worth individuals.

The future of the bridging industry and the Autumn Budget
MoneyAge content editor, Dan McGrath, is joined by head of marketing at Black & White Bridging, Matt Horton, to discuss the bridging industry, the impact of the Autumn Budget and what the future holds for the sector.