House prices on the rise amid cost of living crisis
19th January 2022 11:06
by Jemma Jackson from interactive investor
interactive investor comments on the latest ONS UK House Price Index.
Commenting, Myron Jobson, Personal Finance Campaigner, interactive investor, says: “The UK housing market defied expectations in 2021, and recent data shows that it is off to a flying start this year.
“The ongoing demand-supply mismatch for property continues to fuel the robust pace of price growth. However, the cost-of-living squeeze will hit savings and could hamper potential market growth.
“The cost-of-living crisis has become more acute, with average pay rises failing to keep pace with inflation which surged to a three-decade high last month. The prospect of higher interest rates to tackle rising inflation would apply more pressure on budgets and could exert a further cooling influence on the housing market.
“While the slowing of house price growth would be welcome news for first-time buyers, saving a large enough deposit remains a key challenge for many. And with the Bank of Mum and Dad also facing its own cost-of-living challenges, many wannabe homeowners will struggle to realise their goal.”
Key points:
- UK average house prices increased by 10.0% over the year to November 2021, up from 9.8% in October 2021.
- The average UK house price was £271,000 in November 2021, which is £25,000 higher than this time last year.
- Average house prices increased over the year in England to £288,000 (9.8%), in Wales to £200,000 (12.1%), in Scotland to £183,000 (11.4%) and in Northern Ireland to £159,000 (10.7%).
- London continues to be the region with the lowest annual growth at 5.1%.
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