UK house prices ended the year at a record high, according to Nationwide, with the price of a typical home now £254,822.

This represented double-digit annual price growth (10.4%), or £24,000 on an average property.

The building society said that 2021 was the strongest year for house price growth since 2006.

Demand has remained strong in recent months, despite the end of the stamp duty holiday at the end of September. 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.”

Strongest performers

Wales ended the year as the strongest performing region, with house prices up 15.8% year-on-year. Price growth remained elevated in Northern Ireland at 12.1%, and Scotland saw a 10.1% rise.

In England prices rose by 9%. The Southwest was the strongest performing English region, with annual price growth of 11.5%, closely followed by the Outer Southeast, which saw annual price growth increase to 11.3%.

The Northwest saw the strongest growth of the regions in northern England, with annual price growth of 11.2%.

London was again the weakest performer, with annual growth remaining at 4.2%.

What will happen in 2022?

It appears likely that the housing market will slow next year, since the stamp duty holiday encouraged many to bring forward their house purchase in order to avoid additional tax.

The Omicron variant could reinforce the slowdown if it leads to a weaker labour market. Even if wider economic conditions remain resilient, higher interest rates are likely to exert a cooling influence. Indeed, house price growth has outpaced income growth by a significant margin over the past 18 months and, as a result, housing affordability is already less favourable than before the pandemic struck.

However, the outlook remains extremely uncertain. The strength of the market surprised in 2021 and could do so again in the year ahead.

The average house price climbed to a new record high of £276,759 at the start of the year, despite growth slowing compared to previous months, according to the latest Halifax house price index.

House price growth fell to an increase of just 0.3% in January, the lowest rise since June 2021, while growth remained steady on an annual basis at 9.7%.

Transaction levels rebounded to those seen before the pandemic, and overall, prices were up £24,500 compared to this time last year. They were £37,000 higher than in 2019.

Following the peak activity of 2021, transaction volumes are returning to more normal levels. Affordability remains at historically low levels as house price rises continue to outstrip earnings growth.

Despite record levels of first-time buyers stepping onto the ladder last year, younger generations still face significant barriers to home ownership as deposit requirements remain challenging.

Any predictions that house prices were going to start to pull back once the stamp duty holiday was no longer in play have been proved very wrong.

However, the Halifax house price index released today shows that significant house price rises are starting to slow with only a 0.3% month on month rise, which is the lowest since June 2021. While forecasts of a housing price reduction have not yet fully materialised, it seems inevitable that there will be some sort of slowdown in the coming year

London’s property market has continued to see record numbers of buyers throughout January. A strong indication that the market will remain at high activity levels in the first half of this year.

Whilst larger properties or homes with outside space remain sought-after, apartments in some of London’s more central boroughs are experiencing a steady comeback. This is particularly driven by professionals who are returning to the office and are seeking a home nearby.

 

Expats are now using an independent broker more than ever before to secure their deals whether it be a new or re-mortgage. The survey showed using a broker will reduce completion times, they are fully versed in the expat mortgage process and able to react to the lenders requirements much quicker.

Why should you look for an independent?

Very simple you will have a much bigger choice of deals as an independent is not tied to any one company.

2021 has seen a large increase of approved mortgage applications compared to the same period last year. These increases show how restrictions are being eased by lenders as they compete for every single bit of business. This coupled with record low interest rates is indeed good news for the expat borrower.

Lenders are still holding interest rates steady as the prospect of the Bank of England raising rates has receded slightly.

All this positive news is giving the borrower confidence in the longer term, what happens after the Brexit negotiations are complete remains to be seen.

Expat mortgages are now easier and quicker to complete

The time it takes to complete a new or re-mortgage for expat’s has reduced significantly in the last 2 years.

The industry is seeing a new application in a straightforward case complete in a matter of weeks rather than months. A straightforward re-mortgage is now on average completing in less the 6 weeks which is significantly quicker than this time last year.

Like to know more?

If you require help with your new or re-mortgage please do contact one of our fully qualified independent advisers who will be happy to assist.

Last November’s gross mortgage lending to expats has increased by 4.8% from last month, this is the fourth month on the run. In addition to the month on month increases lending this year has increased 16.4% overall.

Experts believe these strong figures are down to the Brexit negotiations being concluded.

There is definitely less confidence in the property values of other European countries.

Property continues to gain value in the UK at a steady rate and looks like continuing for the foreseeable future unlike the rest of Europe.

One other factor that has contributed to this robust growth is the number of re-mortgages completed. Both expats and UK residents are living in the fear that interest rates are about to jump. These fears are justified as already a good many long-term fixed rate deals have been withdrawn from the market but there are still some very attractive deals on offer.

UK property offers stability

The UK property market without doubt still offers value for money if you own a property or can afford to buy one. Anybody who has owned a property in a good area of the UK over the last 10 years would have seen their investment grow substantially.

It is expected that house price increases will level out as the year goes on with a steady and reliable growth rate, again spelling good news all round.

At present the outlook for 2022 and beyond is very positive within the UK property market, the signs are this will continue for the foreseeable future.

To sum up – traditionally the UK property market has always offered excellent value long term investment potential and there is no reason to believe this won’t continue.

Mortgage advice?

If you need assistance with a new or re-mortgage, then please contact our expert independent advisers who are waiting to help.