A month into 2022, UK house prices posted their strongest start to the year in nearly two decades, according to data released by Nationwide on Tuesday.
Values rose 11.2% in January from a year earlier, leaving the average house price at a record £255,556 ($345,236), nearly £26,000 more than in January 2021 and almost £40,000 more than in January 2020, the UK bank and mortgage provider mentioned.
Last month’s annual gains marked “the fastest pace since June of last year and the best start to the year in 17 years,” Robert Gardner, Nationwide’s chief economist, said in the report.
According to Gardner, robust demand, despite the end of the stamp duty holiday, is supporting price growth nationwide.
The Stamp Duty Holiday was introduced in the UK in the summer of 2020 and removed transfer tax on the first £500,000 of a house sale with savings of up to £15,000 available for buyers. The public holiday was phased out and reverted to the typical stamp duty system at the end of September 2021.
Along with good demand across the country, there is a severe shortage of homes for sale – another factor helping to fuel the “perfect storm” of housing market growth, according to Jonathan Samuels, CEO of the home-based lender in London Octane Capital.
“Real estate agents nationwide cannot restock shelves quickly enough and the level of available properties remains insufficient compared to the huge levels of buyer demand that are still sweeping the market,” he said. “As a result, it remains a seller’s market and buyers are still taking advantage of the low cost of borrowing to offer a little more to secure their favorite property.”