Average house prices up 10% in the last 12 months – so where next?

According to the Nationwide Building Society’s latest House Price Index Report, annual house price growth was 10% in September 2021, down slightly from 11% the previous month.  Overall house prices are around 13% higher than before the Covid-19 pandemic.


Delve a bit deeper into the statistics though and it becomes clear the increases aren’t uniform across the country.  Growth has been stronger in the North of England than the South, and stronger in Wales (15.3%) & Northern Ireland (14.3%) than anywhere else in the UK.  Meanwhile London has seen the smallest increase – around 4.2% – over the last 12 months, after years of being the region where prices were rising fastest.


Why are prices still rising despite a pandemic and all the uncertainty surrounding it?  Well we’re hearing similar stories from many homeowners and would-be buyers at the moment.  Some are only now starting to feel confident about their financial future, so have started to try and buy or move, and some are still looking to leave urban areas in favour of a more rural location with more space and the hope of a better quality of life.


What everyone seems to agree on at the moment is that housing stock is in short supply, and when a contender for ‘dream home’ appears, there’s competition for it, which pushes the price up and sets the precedent for the next similar property.  These are normal market forces, but they’re intense at the moment and forcing prices up.


We’re often asked “Are house prices going to fall or crash?”  Well it’s a brave economist who predicts the future with any certainty, but barring something unexpected it’s hard to imagine prices crashing all the while mortgages are at record low rates, lenders are keen to lend, and demand it outstripping supply.

As we enter the final 3 months of 2021 the outlook remains uncertain.  Many have brought their moving plans forward due to the savings offered by the government’s Stamp Duty holiday, so demand may subside and at the same time unemployment may creep up as government support tails off.  But unless the balance of buyers vs. available properties shifts in favour of more property coming to market, competition for desirable homes will remain tough and prices high.


If you’re looking to become a homeowner, move house or get a better deal on your existing mortgage we’d love to hear from you.   Get in touch and we’ll be help you understand what’s possible, or sign up to our monthly newsletter, to keep your finger on the pulse.

Sam Murphy – 7th October 2021