âThe housing market defied expectations in 2021, with quarterly growth reaching 3.5% in December, a level not seen since November 2006. In 2021, we saw the average house price hit new records eight times. , despite the fact that the UK is subject to a “lockdown”. ‘for much of the first six months of the year.
âThe lack of spending options available to people while restrictions were in place helped increase household cash reserves. This factor, along with the Stamp holidays and the race for space due to working from home, will have prompted buyers to push ahead with home purchases that could have been planned for this year. The expansion of government employment and income support programs has also supported the labor market and may have given some households the confidence to make purchases.
âThe lack of available-for-sale homes and historically low mortgage rates have also helped push annual home price inflation to 9.8%, its highest level since July 2007.
âLooking ahead, the prospect that interest rates may rise further this year to combat rising inflation and mounting pressures on household budgets suggests that house price growth will slow significantly. We expect house prices to maintain their current high levels, but growth from the past two years to be at a slower pace. However, there are many variables that could drive house prices up one way or the other, depending on the impact of the pandemic on the economic environment. “