For sale and sold signs outside properties in London.
(Picture: PA)The race for space seen during the pandemic continued last month, with the average UK house price gaining more than £24,500 in 2021.
Halifax said typical house prices reached a record £276,091 in December, which was up 9.8%, or £24,537, from the £251,554, achieved a year earlier.
That marked the strongest year-on-year cash rise since March 2003, the mortgage lender added. In London prices rose 2.1% over the year to £525,351.
Average UK prices were also 1.1% higher than in November, but growth is expected to slow this year as more ‘normal’ conditions start to return.
Last year the housing industry benefited from a combination of people reassessing how much space they need during lockdowns, competition for limited supply, and low interest rates. A stamp duty holiday, which ended in September, also enticed buyers.
Halifax’s managing director Russell Galley said: “Looking ahead, the prospect that interest rates may rise further this year to tackle rising inflation, and increasing pressures on household budgets, suggests house price growth will slow considerably.”
He said: “Our expectation is that house prices will maintain their current strong levels but that growth relative to the last two years will be at a slower pace. However, there are many variables which could push house prices either way, depending on how the pandemic continues to impact the economic environment.”
Graham Cox, founder of mortgage broker Self-Employed Mortgage Hub, said the December figures “could be the last hurrah for runaway house price inflation”.
Cox said: “Households are starting to batten down the hatches and are facing a financial tsunami of higher fuel and food bills, national insurance increases and rising interest rates.”
