UK Housing

UK Housing Market Chart Book

London transactions outperform, but not prices

The jump in transactions during the pandemic was larger in London than other regions as the market didn’t experience the same drop in supply as elsewhere. That reflected many existing homeowners adjusting to remote working by moving further afield, giving an opportunity for first-time buyers to get on the London housing ladder. More plentiful supply has also caused house price growth in the capital to underperform the national average since the start of the pandemic. While house prices rose by 16% between Q4 2019 and November 2021 nationally, the average increase in London was 9%. Outer London boroughs tended to outperform more central areas, but Hammersmith & Fulham, Kensington & Chelsea, and Islington were striking exceptions.

25 January 2022

UK Housing Market Data Response

RICS Residential Market Survey (Dec.)

The number of homes being listed for sale dropped again in December while demand continued to climb. As a result, we think house prices will continue to rise at pace in the near term.

20 January 2022

UK Housing Market Update

The anatomy of the pandemic price boom

A breakdown of house price growth over the past two years confirms that remote working has altered the nation’s housing needs. But what households can afford, rather than what they desire, will be a more important driver of house prices over the next few years.

19 January 2022

Our view

We think it will take longer than most others expect for rising interest rates to bring down the curtain on the COVID-19 house price boom. A large stock of household savings, the ongoing adjustment to home working and very limited stock on the market will conspire to drive house prices up by a further 5% in 2022, much more than the consensus expectation of a 2% gain. But rising interest rates will cool house price growth and transactions come the second half of 2022 and in 2023. However, with the labour market in good shape, Bank Rate would have to rise to over 2% for the housing market to get into correction territory, which neither we nor investors anticipate.