In keeping with last year, Wales kicked off 2022 as by far the strongest performing nation or region in the UK. With annual house price inflation of 13.9%, down marginally from December, the average house price fell slightly to £205,253.
Northern Ireland also continues to record strong price growth, with prices up 10.2% on last year, giving an average property value in January of £170,982.
House price growth remains strong in Scotland too, though the annual rate of inflation slowed somewhat to 8.9%, with the average property price edging down to £192,698.
In England, the North West was once again the strongest performing region (up 12.0% year-on-year, average house price of
£213,200) and now has the second-highest rate of annual growth in the UK.
While London remains the weakest performing area of the UK, the capital continued its recent upward trend with annual house price inflation accelerating for a third straight month to now stand at 4.5%. This was double the rate recorded in December and its strongest performance in over a year.
Russell Galley, Managing Director, Halifax, comments: “House price growth slowed somewhat at the start of the year, rising by just 0.3% in January, the smallest monthly increase since June 2021. This followed four consecutive months of gains above 1%, and with annual growth remaining at 9.7%, the average UK house price was little changed, edging up slightly to a new record high of £276,759. Overall prices remain around £24,500 up on this time last year, and £37,500 higher than two years ago.
“Following the peak activity of 2021, transaction volumes are returning to more normal levels. Affordability remains at historically low levels as house price rises continue to outstrip earnings growth. Despite record levels of first-time buyers stepping onto the ladder last year, younger generations still face significant barriers to homeownership as deposit requirements remain challenging.
“This situation is expected to become more acute in the short-term as household budgets face even greater pressure from an increase in the cost of living, and rises in interest rates begin to feed through to mortgage rates. While the limited supply of new housing stock to the market will continue to provide some support to house prices, it remains likely that the rate of
house price growth will slow considerably over the next year.”
Guy Gittins, CEO of Chestertons, says: “London's property market has continued to see record numbers of buyers throughout January. A strong indication that the market will remain at high activity levels in the first half of this year. Whilst larger properties or homes with outside space remain sought-after, apartments in some of London's more central boroughs are experiencing a steady comeback. This is particularly driven by professionals who are returning to the office and are seeking a home nearby.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, comments: "20221 was a bumper year for the housing market and was always going to be a tough act to follow. Monthly house price growth may have fallen slightly, but nevertheless, the year has also got off to a good start with confidence in the housing market remaining, supported by relatively cheap mortgages, even though interest rates are edging up from all-time lows.
"While rates have increased since the autumn where we saw the historical low point for fixes, there is still some incredible value in ten-year fixes in particular, with several lenders launching deals recently or reducing pricing."
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: "Though price growth is slowing, these figures demonstrate the underlying strength of the market and how likely it is to withstand increasingly stretched affordability.
"We know from what’s happening on the ground that the double-whammy of rising inflation and interest rates are already prompting some who thought prices could only go one way to request valuations and make properties available for sale.
"On the other hand, supply still can’t keep up with demand, especially for family houses, and with around 50 per cent of homes owned outright there are many who are relatively unaffected by interest rate rises."
