“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 individuals whereas restrictions have been in place helped enhance family money reserves. This issue, alongside the Stamp Responsibility vacation and the race for area on account of homeworking, could have inspired consumers to carry ahead house purchases which will have been deliberate for this yr. The extension of the Authorities’s job and revenue assist schemes additionally supported the labour market and will have given some households the arrogance to proceed with purchases.
“An absence of obtainable properties 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.
“Trying forward, the prospect that rates of interest could rise additional this yr to deal with rising inflation, and rising pressures on family budgets, suggests home worth progress will sluggish significantly. Our expectation is that home costs will preserve their present robust ranges however that progress relative to the final two years will likely be at a slower tempo. Nonetheless, there are various variables which may push home costs both approach, relying on how the pandemic continues to affect the financial surroundings.”