Average UK house price increased by £27,000 last year
The average UK house price increased by £27,000 last year, ending 2021 on a record high of £275,000, according to official figures.
The Office for National Statistics (ONS) said the average house price across the whole of the UK, as well as in England and Wales, reached record levels in the month of December.
Across the UK generally, house prices increased by 10.8% over the year to December 2021, accelerating from 10.7% in November 2021.
The average house price in Wales increased by 13.0% over the year to December 2021, accelerating from an increase of 12.6% in November 2021.
The latest increase pushed the average house price in Wales to a record level of £205,000.
In England, property values increased by 10.7% over the year to December 2021, up from an increase of 10.5% in the year to November 2021, with the average house price at a record high of £293,000 in December.
The average house price in Scotland increased by 11.2% over the year to December 2021. This was lower than a 12.1% increase in the year to November 2021. The average house price in Scotland reached £180,000.
In Northern Ireland, property values increased by 10.7% annually to reach £159,000. The ONS warned that data for Northern Ireland for the fourth quarter of 2021 is not yet available, and so it has carried forward figures from the third quarter, until the latest figures can be incorporated.
ONS head of Inflation Mike Hardie said: “House prices in the UK, England and Wales all reached record levels this month, with the average UK house price at £275,000 in December 2021, £27,000 higher than this time last year.
“UK rental prices accelerated at their fastest pace since 2017, with increases across every region in England, including London.”
A separate ONS report also released on Wednesday showed that private rental prices paid by tenants in the UK increased by 2.0% in the 12 months to January 2022 – representing the sharpest annual growth rate since February 2017.
Excluding London, private rents increased by 3.0% year on year.
Rents in London have increased by just 0.1% annually, reflecting remote working trends as well as an increase in supply, the ONS said.
Nitesh Patel, strategic economist at Yorkshire Building Society, said: “A key challenge in the current housing market is the lack of supply of homes for sale whilst demand continues to remain strong – which perhaps explains the strong price performance in southern England.
“For most of last year the stamp duty holiday had provided a boost but even after that ended prices have continued to rise. Low borrowing costs and a strong jobs market are key drivers but in the coming months a further deterioration in household finances may take some of the heat out of the market.”
Alan Fitzpatrick, from mortgage company Habito, said: “Mortgage applicants’ affordability is likely to decline in the coming months. Even though average wage growth picked up in January, it failed to keep up with inflation.
“The Consumer Price Inflation report published this morning revealed that inflation has hit a 30-year high of 5.5%.”
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