This year is set to be the UK’s busiest in terms of housing transactions since the financial crisis, as one in 16 homes will have changed hands.
By the end of 2021, one in 16 homes will have been sold in the previous 12 months – the highest rate since 2007.
This was according to Zoopla’s latest house price index, which also reported that annual house price growth in October was 6.9 per cent.
Hot market: UK set for busiest housing transaction year since 2007
It was slightly higher than the 3.5% recorded in October last year, but it still represents a significant increase over August 2021’s 7% growth.
The quarterly figures showed a slower pace of overall growth, down from 2.8% in July to 1.2% in October.
The average value of a home is now £240,000, following 16 months of continued inflation.
This up from £200,000 five years ago.
Over the past 12 months alone, average UK prices have risen by £15,500, with the South East and South West recording growth of more than £22,000.
In percentage terms, Wales saw the fastest growth rate in the 12 months to October. There was an increase in the value of properties by 10.8 percentage over the twelve-month period.
This was then followed by England’s North West, where prices rose by 9 percentage points.
London experienced the greatest price increase of 2.3% after it was hit by the pandemic.
Zoopla claimed that the price increase was due to higher demand from buyers.
New homes are in high demand, and so is the inventory of properties available.
In October, house prices declined slightly compared to the past two months.
The year ended October with a 28 percent increase in buyer demand, while there was a 5% to 10% drop in supply, and 45% below the average for the past five years.
However, buyers are looking for larger homes and there is a rising gap in demand between flats and houses.
There were fewer houses for sale than the five-year average.
Although flats were down by 15% on average over the past five years, they still had a lot of inventory.
Price growth was also affected by the contrast in stock availability. Average flats rose in value just 1.6% over the five-year average of 1.2 per cent.
The annual house price increase is 8.3%, almost twice the average over the past five years of 4.2 percent.
Grainne Gilmore is Zoopla’s head of research. She stated that there were more homes on the market in the next year which may reduce the imbalance between supply and demand.
‘New supply will start to rise at the turn of the year as households use the holiday period to make a decision around making a move,’ she said.
‘In typical years, the highly seasonal supply of homes being listed for sale slows in the run up to Christmas, but rises sharply in the new year.
‘On average, the supply of listings at the end of January runs some 50 per cent higher than the start of December.
‘Buyer demand will remain strong moving into next year, but as the market starts to normalise in 2022, there may be an increase in the proportion of activity among movers, who are active in the market as sellers as well as buyers. This will help to ease some of the supply constraints.
‘Other factors that will affect prices next year include the looming economic headwinds in the shape of rising inflation – which will push household costs higher.
‘Even with some interest-rate rises, mortgage rates are likely to remain relatively low compared to long-run averages, and there is more room for price growth across some of the most affordable housing markets.’