Home Based Business Ideas UK: Property And Share Prices At Record Levels Despite Poor Economic Outlook...

Property And Share Prices At Record Levels Despite Poor Economic Outlook As 2021 Draws To A Close

Nationwide and the Halifax have predicted the market would slow next year because the stamp duty holiday, which ended in September, forced buyers to bring purchases forward.

Nationwide also said the slowdown could be made worse by the spread of Omicron.

Interest rate factor

Nationwide's chief economist Robert Gardner said that even if the economy remains strong in spite the virus, higher interest rates were likely have a "cooling influence" on the housing market.

"House price growth has outpaced income growth by a significant margin over the past 18 months and, as a result, housing affordability is already less favourable than before the pandemic struck," Mr Gardner added.

The lender could be anticipating further increases to interest rates in the new year. Earlier this month, the Bank of England hiked base interest rates to 0.25% from their historic lows of 0.1% in a bid to curb the threat of rising inflation.

The US is expected to raise rates three times next year to tackle the highest price rises in nearly 40 years.

But the central banks cannot raise rates too high as this will mean higher payments on the trillions in debt they owe to lenders.

Increases in the cost of borrowing will be bad news for people trying to get on the property ladder and could herald the end of the decade long property and stock market boom.

Wales saw the highest growth with prices increasing 15.8% compared to the same time last year. Meanwhile, price increases in London slowed compared to last year, climbing just 4.2%.

In an interview with BBC's Today programme, Andrew Harvey, a senior economist at Nationwide, said the pandemic had caused a change in the behaviour of buyers who had been looking to leave large cities in favour or suburban and rural areas.

"I think London probably has suffered as a result of that," he said.

Average prices change across the UK

· Wales: Up 15.8% to £196,759

· Northern Ireland: Up 12.1% to £167,479

· South West: Up 11.5% to £294,845

· Outer South East: Up 11.3% to £329,869

· North West: Up 11.2% to £196,806

· Yorkshire and Humberside: Up 10.8% to £190,855

· East Anglia: Up 10.4% to £268,146

· East Midlands: Up 10.4% to £221,813

· Scotland: Up 10.1% to £172,605

· West Midlands: Up 9.4% to £227,031

· Outer metropolitan area of London: Up 8.8% to £410,992

· North: Up 7.7% to £148,105

· London: Up 4.2% to £507,230

Source: BBC.

Mr Gardner said it was the first time since 1973, when Nationwide began publishing house price data, that the largest price rises had been seen in Wales.

"Price growth remained elevated in Northern Ireland at 12.1%, the strongest end to the year for the region since 2007," he said.

"Annual house price growth in Scotland was 10.1%, in line with the wider UK."

The year has been dominated by Covid lockdowns and restrictions which saw international flights to the UK slump by 71%, retail giants such as Debenhams go bust and thousands of small businesses and hospitality firms suffer losses.

Other businesses prospered during the last two years. Not just the likes of Amazon, but any business that adapted to the new world of online transactions and Zoom!

I want to thank all my viewers, listeners and readers for all your support this year, and wish you all a prosperous New Year.

Home Based Business Ideas UK

Friday, December 31, 2021

Property And Share Prices At Record Levels Despite Poor Economic Outlook...

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