Halifax House Price Index December 2021

UK house prices were up 9.8% annually in December, meaning house prices rose at a faster rate in 2021 than in any calendar year since 2004.
House prices reached another record high, averaging £276,091 over the month.
By means of comparison, Nationwide reported that house prices accelerated by 10.4% in December.

Halifax house price index, year-on-year

Source: Halifax, IHS Markit

Key trends

The housing market defied expectations in 2021, with the average house price reaching new record highs on eight occasions, despite the UK being subject to lockdown and Covid-19 restrictions for the first half of the year. In cash terms, that was a £24,000 rise in the cost of the typical home over the course of 2021.
The mortgage lender said growth was underpinned by the stamp duty holiday and demand for more space from buyers during lockdown.
A lack of available homes for sale, and historically low mortgage rates also helped drive house price inflation.

Outlook

The pace of activity is expected to slow over 2022, as rising interest rates and inflationary pressures squeeze household budgets.
Strutt & Parker forecasts UK house prices to grow by up to 7% in 2022, with a downside risk of +2%. While price growth is likely to remain positive, these figures indicate the pace of growth will moderate as market activity settles following a buoyant period over the past two years.
From an economic perspective, there are many variables which could push house prices either way, with the labour market’s continued resilience offering valuable upside support.