Home costs elevated by greater than £24,500 on common in 2021, with the worth of a typical UK property hitting a brand new document excessive of £276,091 in December 2021, in response to evaluation from Halifax.
Property costs hit new document highs eight instances final yr, in response to its month-to-month index, regardless of the impacts of the coronavirus pandemic.
However home worth progress is anticipated to sluggish significantly this yr, the report added.
The common UK home worth elevated by 9.8% yearly and by 1.1% month on month in December.
Russell Galley, managing director, Halifax, stated: ‘UK home costs climbed once more in December for the sixth month in a row, rising by 1.1%.
‘The common worth for a property now stands at £276,091, a rise of greater than £24,500 in comparison with December 2020, marking the strongest year-on-year money rise since March 2003.
‘The housing market defied expectations in 2021, with quarterly progress reaching 3.5% in December, a degree not seen since November 2006.
‘In 2021 we noticed the typical home worth attain new document highs on eight events, regardless of the UK being topic to lockdown for a lot of the primary six months of the yr.
‘The shortage of spending alternatives afforded to folks whereas restrictions have been in place helped increase family money reserves.
‘This issue, alongside the stamp responsibility vacation and the race for house because of home-working, may have inspired consumers to deliver ahead dwelling purchases that will have been deliberate for this yr.
‘The extension of the Authorities’s job and earnings help schemes additionally supported the labour market and will have given some households the arrogance to proceed with purchases.
‘A scarcity of obtainable houses on the market, and traditionally low mortgage charges, have additionally helped drive annual home worth inflation to 9.8%, its highest degree since July 2007.
‘Wanting forward, the prospect that rates of interest could rise additional this yr to sort out rising inflation, and rising pressures on family budgets, suggests home worth progress will sluggish significantly.
‘Our expectation is that home costs will keep their present sturdy ranges however that progress relative to the final two years will probably be at a slower tempo.
‘Nevertheless, there are numerous variables which might push home costs both method, relying on how the pandemic continues to impression the financial setting.’
annual home worth progress throughout the UK, Wales remained the strongest performer, recording annual home worth inflation of 14.5% in December.
The speed of improve in Wales was barely decrease than a 14.8% rise recorded in November.
Northern Eire was additionally one of many strongest performing components of the UK, with home worth progress at 10.6%.
Home costs in Scotland elevated by 9.7% yr on yr.
In England, the North West was the strongest area, with home costs up by 11.8%.
London remained the weakest performing space for annual home worth inflation, with a 2.1% improve.
Martin Beck, chief financial adviser to the EY Merchandise Membership stated: ‘A fall in mortgage approvals in late 2021 to pre-pandemic ranges means that the tip of the stamp responsibility vacation in October has prompted a return to extra regular ranges of housing market exercise and demand.
‘The Financial institution of England’s resolution in December to boost financial institution price will feed by into larger mortgage charges and is prone to be adopted by additional rate of interest will increase later this yr.
‘Households’ spending energy is being squeezed by rising inflation and faces additional strain within the spring from tax rises.’
Jan Crosby, head of infrastructure, constructing and development at KPMG UK, stated: ‘The worth rises seen final yr will proceed to impede first-time consumers particularly.’
Nathan Emerson, chief government of property professionals’ physique Propertymark, stated: ‘Our housing market report for November revealed a 12% improve within the common variety of registered consumers, however the lowest variety of houses in the marketplace per department ever recorded.
‘This means fierce competitors for consumers as there continues to be an enormous hole between provide and demand.
‘We anticipate that our subsequent report will mirror this information and proceed the identical pattern in December, as brokers on the bottom report a particularly busy month compared to earlier years.’
Andrew Montlake, managing director of mortgage dealer Coreco, stated: ‘The previous two years have radically reworked what folks need from their houses and despite the fact that charges are rising they’re nonetheless exceptionally low in historic phrases. The market can also be being propped up by a continual lack of provide.’
Mark Harris, chief government of dealer SPF Non-public Shoppers, stated: ‘Low mortgage charges have been one of many contributing elements to the housing growth and, though some lenders are beginning to tweak mortgage charges upwards, pricing stays aggressive.’
Man Gittins, chief government of property company Chestertons, stated: ‘We predict the imbalance between provide and demand to stay, making a constantly aggressive marketplace for house-hunters.’