The typical price of a home reached a record high of £254,822 in December, marking a £23,902 increase over the past year, Nationwide Building Society said.
Chief economist Robert Gardner said: “The price of a typical UK home is now at a record high of £254,822, up £23,902 over the year – the largest rise we’ve seen in a single year in cash terms.
“Prices are now 16% higher than before the pandemic struck in early 2020.”
Our latest #NBSHousePriceIndex shows 2021 was the strongest calendar year for house price growth (10.4%) since 2006, with price of a typical UK home now a record high of £254,822 - up nearly £24,000 over the year. https://t.co/i86Ae9Zyav
— NBS External Affairs (@NationwidePress) December 30, 2021
Nationwide said house prices were 10.4% higher annually and 1.0% higher month on month in December.
Looking at what has been behind the price increases, Mr Gardner said demand for homes has remained strong despite the ending of the stamp duty holiday this year.
He said: “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.”
Mr Gardner said the outlook for the housing market “remains extremely uncertain”.
The strength of the market surprised in 2021 and could do so again in the year ahead
Robert Gardner, Nationwide Building Society
He continued: “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.”
Nationwide also published quarterly figures showing house price trends in the UK’s nations and regions of England.
It said Wales ended the year as the strongest performer, with house prices there up by 15.8% year on year.
Mr Gardner said it is the first time in the history of the regional series (which started in 1973) that Wales has ended the year as the top performer.
He said annual house price growth in Northern Ireland at 12.1%, was the strongest end to the year it has had since 2007.
Annual house price growth in Scotland was 10.1%, in line with the UK generally, Mr Gardner added.
He said: “England saw a slight increase in annual price growth to 9.0%, from 8.5% in the third quarter…
“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.”
Here are average house prices in the fourth quarter of 2021, followed by the annual increase in cash and percentage terms, according to Nationwide Building Society:
– Wales, £196,759, £26,913, 15.8%
– Northern Ireland, £167,479, £18,096, 12.1%
– South West, £294,845, £30,333, 11.5%
– Outer South East (includes Ashford, Basingstoke and Deane, Bedford, Braintree, Brighton and Hove, Canterbury, Colchester, Dover, Hastings, Lewes, Fareham, Isle of Wight, Maldon, Milton Keynes, New Forest, Oxford, Portsmouth, Southampton Swale, Tendring, Thanet, Uttlesford, Winchester, Worthing), £329,869, £33,579, 11.3%
– North West £196,806, £19,882, 11.2%
– Yorkshire and the Humber, £190,855, £18,530, 10.8%
– East Anglia, £268,146, £25,342, 10.4%
– East Midlands, £221,813, £20,861, 10.4%
– Scotland, £172,605, £15,836, 10.1%
– West Midlands, £227,031, £19,428, 9.4%
– Outer Metropolitan (includes St Albans, Stevenage, Watford, Luton, Maidstone, Reading, Rochford, Rushmoor, Sevenoaks, Slough, Southend-on-Sea, Elmbridge, Epsom and Ewell, Guildford, Mole Valley, Reigate & Banstead, Runnymede, Spelthorne, Waverley, Woking, Tunbridge Wells, Windsor and Maidenhead, Wokingham), £410,992, £33,316, 8.8%
– North East, £148,105, £10,574, 7.7%
– London, £507,230, £20,668, 4.2%