It’s been an incredible year for house prices, with the most significant increase recorded in cash terms.
The latest Nationwide Building Society data shows the average house price in the UK rose by close to £24,000 this year.
This impressive rise in average house prices means they reached a new record high of £254,822 this month, up £23,902 throughout 2021.
Robert Gardner, chief economist at Nationwide, explained: “Prices are now 16% higher than before the pandemic struck in early 2020.”
The Nationwide data shows that average house prices rose 10.4% annually and were up 1% in December when viewed month-on-month.
Drivers behind these house price increases included strong demand for homes, despite the end of the stamp duty holiday.
“Mortgage approvals for house purchase have continued to run above pre-pandemic levels, despite the surge in activity seen earlier in the year. Indeed, in the first 11 months of 2021 the total number of property transactions was almost 30% higher than over the same period of 2019.
“At the same time, the stock of homes on the market has remained extremely low throughout the year, which has contributed to the robust pace of price growth.”
Looking ahead, Nationwide says the outlook for the UK housing market “remains extremely uncertain.” Gardner said:
“The strength of the market surprised in 2021 and could do so again in the year ahead.
“The market still has significant momentum and shifts in housing preferences as a result of the pandemic could continue to support activity and price growth.”
As is often the case with these house price figures, there is a great deal of regional variation in the data.
Wales was the strongest regional performer, with average prices rising by 15.8% in a year.
It’s the first time since the regional data, started in 1973, has shown Wales as the strongest performer.
Annual house price growth in Northern Ireland was 12.1%, its strongest year since 2007.
And in Scotland, average house prices rose 10.1%, in line with the UK average.
England reported average house price growth of 9% in 2021, with Gardner saying:
“The South West was the strongest performing English region, with annual price growth of 11.5%, the largest calendar year increase in the region since 2004.”