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UK house prices climb 10% in November

·Business Reporter, Yahoo Finance UK
·3-min read
UK house prices rose 10% to £271,000 in November, up from 9.8% in October. Photo: Leon Neal/Getty Images
UK house prices rose 10% to £271,000 in November, up from 9.8% in October. Photo: Leon Neal/Getty

The average UK house price saw double-digit growth in the year to November, gaining £25,000 ($34,038) when compared to the previous year.

Property prices in Britain rose 10% to £271,000 in the period, up from 9.8% in October, the latest figures from the Office for National Statistics (ONS) revealed, thanks to cheap mortgage rates, the return on high loan-to-value mortgages, and a change in working habits.

This was despite predictions the sector would begin to cool ahead of the traditionally quiet festive period, and once the government’s stamp duty holiday ended, a tax break designed to prop up the housing market, and help consumers as the economy contracted during the COVID-19 lockdowns.

Watch: How much money do I need to buy a house?

In England, average prices came in at £288,000. The average house price in Wales was £200,000, while Scotland and Northern Ireland saw £183,000 and £159,000 respectively.

However, the overall UK figure was slightly lower than the record average of £272,273 seen in September as buyers rushed to the market before the tax break ended.

UK house price growth increased to 10% in November. Chart: ONS
UK house price growth increased to 10% in November. Chart: ONS

The holiday was initially extended from 31 March 2021 to the end of June and once more, tapering from June to the end of September, as people rushed to market. House price inflation peaked at 13.5% in June, the highest in more than 15 years, before the break was phased out.

Housebuyers could have cashed in on savings of up to £15,000 if they bought at the right time.

The break caused a frenzy in the market, with many using it as an excuse to make long-awaited moves or buy for the first time. However, some said that with climbing house prices over the past year the discount was quickly priced in and that it "distorted" the market.

Read more: What end of stamp duty holiday means for UK housing market

House prices in November continued to grow strongly across the country. London was the region with the lowest annual price growth for the fourth consecutive month, but remained the most expensive place to live.

“There is plenty of evidence that buyer demand remains strong, especially for houses, and with relatively little stock available it is a house seller’s market,” Phillip Stevens, director of the Richmond estate agency Antony Roberts, said.

“The interest rate rise does not appear to have dented buyers’ confidence thus far, nor their ability to purchase property, but with inflation at a 30-year high that could change as it may well be the first hike of many.

“Those wanting to make their move will be keen to do so sooner rather than later but whether they can will depend on what stock launches onto the market this spring.”

Read more: Build-to-rent: A housing market revelation or the next burden for consumers?

Meanwhile, rent showed a similar pattern with prices rising in many regions but falling a marginal 0.1% in London.

Rents rose 1.8% during 2021, and excluding London they were up 2.7%, the fastest overall rise since August 2016.

“Officially rents are up 1.8%, but anyone who has been battling to find an affordable rental property, or having to offer more than the advertised rent to secure somewhere knows that in reality rents are rising far faster in much of the UK,” Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said.

The ONS figures measure all rental prices, rather than just new rents coming to the market. It means someone who locked in a deal one or two years ago will feed into these figures in exactly the same way as someone who rented yesterday. And as a result, it is understating recent rental rises.

Watch: Why are house prices rising during a recession?

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