House price rise uncovered: The exact amount prices are rising – 10% hike last year

Martin Roberts discusses the rise in house prices

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The value of Britain’s homes jumped by £24,500 in a remarkable year for the property market, spurred on by behavioural changes and the Government’s stamp duty holiday. The rise is the biggest annual cash boost since before the 2008 financial crash.

The price of the average UK home jumped to more than £250,000 in 2021, finishing at £275,091.

Monthly figures just released by Halifax show UK house prices jumped 9.8 percent during 2021, despite the year starting off with a strict lockdown and coronavirus cases remaining high all year round.

Last month, house prices rose by 1.1 percent in December alone, the sixth consecutive month of growth.

But after a stellar year in 2021, experts are apprehensive about what will come next for homeowners.

READ MORE: How thousands could be wiped off the value of your home – warning

Factors that helped fuel the buying boom include the Government’s wildly popular stamp duty holiday, which came to an end in September.

A shortage of housing stock also helped push prices up significantly, with developers hampered by lockdowns and worldwide material shortages.

But by far the biggest worry for estate agents and wannabe buyers in 2022 is the rise in inflation – and how the Bank of England’s interest rates could make borrowing trickier.

In March 2020, the central bank lowered borrowing rates to a rock bottom 0.1 percent prior to the housing market effectively closing in the first lockdown.

But when the market reopened in the summer, prospective buyers leaped on the opportunity to pay an all-time low on their borrowing.

However, as the saying goes, all good things must come to an end, and the bank has pushed interest rates up to 0.25 percent, with more rises expected throughout 2022.

Inflation is already well above the Bank of England’s two percent target, currently sitting at 4.6 percent.

What’s more, household budgets are being squeezed to unprecedented levels due to skyrocketing energy bills and a looming tax increase in April, leaving prospective buyers wondering if now is a good time to get onto the market.

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Russell Galley, Halifax Managing Director, said the boom is unlikely to last into 2022.

He 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.

“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.”

How much will prices rise in 2022?

Anthony Codling, CEO of property platform twindig, explained to Express.co.uk that 2022 will paint a markedly different picture of the housing market.

He said: “Whilst a credit crunch is not on the cards, household budgets are likely to be squeezed, and mortgage rates are more likely to rise than fall this year.

“The Resolution Foundation has predicted that 2022 will be the year of the squeeze and this squeeze may also impact house prices.

“However, there remains a shortage of homes for sale and housing transactions and mortgage approvals bounced back to more normal levels quicker than we expected following the end of the stamp duty holiday.

“For now, we are sticking to our central case that house prices will rise by five percent in 2022.”

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