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.
See also:
How
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