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Halifax House Prices (Dec.)

Another substantial rise in the Halifax house price index in December ensured that the lender agreed with Nationwide that the rise in house prices over the 2021 calendar year was the strongest for at least 15 years. And there is no sign of prices losing momentum yet.
Andrew Wishart Property Economist
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UK Housing Market Update

Rental growth approaching a peak

Record high rental growth at the start of the year is likely to mark a peak given signs that tenant demand is starting to ease. But strong wage growth and the rising cost of buying as mortgage rates rise mean rental growth is set to ease rather than collapse. Property Drop-In (19th May): What will rising interest rates mean for commercial property returns in the US, UK and Europe? Join our 20-minute briefing on the outlook for returns today at 10:00 ET/15:00 BST. Register now.

19 May 2022

UK Housing Market Outlook

House prices heading for a fall

If we are right that the Bank of England will have to raise interest rates to 3.00% to stamp out inflation then we are on the cusp of the fastest increase in mortgage rates since the late 1980s. That caused house prices to fall by 20%. But the tight labour market, lower loan-to-value ratios, and a lower peak in interest rates mean the drop in prices should be less dramatic this time. We expect house prices to fall by 5% over the next two years, reversing a fifth of the increase since the pandemic began.

13 May 2022

UK Housing Market Data Response

RICS Residential Market Survey (Apr.)

The housing market shrugged off the effects of rising mortgage rates and the cost-of-living crisis in April as intense competition between buyers bid up prices further. However, with mortgage rates set to increase sharply over the rest of the year, the days of the pandemic house price boom are now numbered.  

12 May 2022

More from Andrew Wishart

UK Housing Market Update

UK house price growth set for a year of two halves

Strong demand will ensure that house prices maintain their momentum in the first half of the year. But rising mortgage rates will weigh on demand further out, causing prices to cool.

6 January 2022

UK Housing Market Data Response

Mortgage Lending (Nov.)

Mortgage approvals stabilised in November, consistent with other evidence that demand remained robust after the stamp duty holiday ended. Even though approvals have softened to a similar level to 2019, the lack of stock for sale means that price growth is likely to prove stronger than transactions.

4 January 2022

UK Housing Market Chart Book

Strength to persist into 2022

The continued strength of the housing market after the end of the stamp duty holiday shows that it was far more than the tax break that kept prices surging in 2021. The three key drivers of demand - low mortgage rates, high household saving, and a reassessment of housing need given remote working - all remain in place. As a result, there has been no decline in appetite to move house as indicated by very high web search activity for homes for sale. But with stock limited, that is more likely to translate into higher prices than a boom in transactions. That’s why we expect house prices to increase by a further 5% in 2022, more than most other forecasters expect. This will be the final UK Housing publication of the year. Capital Economics’ London office will be closed after 24th December and will reopen on 4th January, when we look forward to being back in your inbox. In the meantime, we’d like to wish all our readers a Merry Christmas and a Happy New Year.

23 December 2021
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