Zoopla: UK house prices jump 7.1% in 2021

Posted on Thursday, December 30, 2021

The price of the average UK house jumped 7.1% in 2021 to £240,800, driven by the stamp duty holiday, a lack of supply and a race for space sparked by the pandemic.

Prices lifted by £16,000 in the year to last month, with five million homes increasing by more than £35,000, according to the Zoopla November House Price Index.

Demand outstripped supply with the flow of new homes coming onto the market this year falling by 9.5% compared to 2020, pushing up prices.

In almost every region of the UK house prices rose this year by more than 2020 and 2019 combined.

Only London and Scotland lifted more modestly, with growth of 2.4% and 5.3%, respectively.

By contrast, average prices in Wales jumped by 11.1% over the last 12 months, while prices in the North West are up 9.1%.

Increased activity resulted in the value of the UK’s housing stock rising by £670bn this year to £9.5trn.

Zoopla head of research Grainne Gilmore says: “This year has been a record year for the market, with the stamp duty holiday and the pandemic-led ‘search for space’ among homeowners resulting in the highest number of sales since before the financial crisis, with 1.5 million transactions.”

However, the report says demand has eased since the end of the stamp duty holiday in September, but it expects a post-Christmas bounce back.

The index says: “The levels of buyer demand, sales activity and new listings have slowed in recent weeks, in line with the usual seasonal trends.”

“The bounce-back from the Christmas period slowdown is just as evident. Last year, property searches more than doubled after Christmas Day.”

It adds: “As well as the usual seasonal pick up in demand, we are anticipating that more demand will also be fuelled by a continued ‘reassessment of home’ due to the trends that emerged during the pandemic. These include households wanting more space – an extra bedroom, or a larger garden.”

Next year the report forecast house price growth of 3% for 2022, with transactions levels at 1.2m, down from 1.5m this year but in line with trends over the previous five years.

The index noted that the Bank of England last week raised interest rates to 0.25% from 0.1%, the first rate rise in three years.

It adds that “those hoping to buy a home in 2022 may find rates have risen, albeit modestly, given the 0.15% increase”.

The report adds: “We expect market conditions to normalise next year, in terms of the speed at which the market is moving and also who is moving – so after the busy start to the year, supply pipelines will have a chance to rebuild.

“Even so, the demand/supply imbalance is unlikely to fully unwind, and this will be one factor underpinning pricing into next year.

“There is also more headroom for price growth in some of the most affordable areas of the country.”


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