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House prices: The winners and losers by region

Is your area in a boom? And what will 2022 look like? NimbleFins takes a look.

House prices hit a record high in 2021, with the average UK property rising in value by £24,500 in a year. But not all areas have seen quite such a rapid boom.

Despite fears of a property slowdown brought on by the pandemic, house prices rose an astonishing 9.8% across the UK in 2021, according to the Halifax House Price Index. The average cost of a home is now £267,091 after the largest annual rise since March 2003.

Experts still remain cautious for 2022, worrying that the soaring cost of living could slam the breaks on any more rapid rises.

The biggest rise came for Wales, with a boom of 14.5% in the last 12 months. Its house prices are below the national average—coming in at £205,579, but for those looking for an investment, or wanting to sell their home, Wales is looking a very healthy market.

The North West of England was the second best performing region in the UK, jumping 11.8%.

Meanwhile, Northern Ireland jumped 10.6% with an average house price of £170,946, followed by Scotland which saw prices rocket 9.7% to an average of £192,988—the most expensive they have ever been north of the border.

However the big loser was London, where house prices rose 2.1%. Although a rise is still a rise, inflation was found to have risen 5.4% in December—its highest in 30 years, meaning London’s property market may have lost money in real terms.

The dizzying house price rise has been put down to people wanting more space and having more savings due to lockdowns, plus low mortgage rates, the stamp duty holiday and a shortage in homes coming onto the market.

Property experts believe homes will continue to rise in value in 2022 although at a slower pace.

Andrew Simmonds, director at Bristol-based Parker's Estate Agents: “Having defied expectations throughout the year, it was no real surprise that December saw much of the same. Although prices this year will grow at a slower rate than in 2021 due to rising rates, taxation and the energy crisis, the market certainly won't go off a cliff due to the lack of supply.

“I am expecting to see many vendors sell and move to rented with a view to onward purchasing later in 2022 or 2023.”

Graham Cox, founder of the Bristol-based Self-Employed Mortgage Hub: “Households are starting to batten down the hatches and are facing a financial tsunami of higher fuel and food bills, national insurance increases and rising interest rates.

“House prices are notoriously hard to predict, but after being artificially pumped higher by the stamp duty holiday, it's difficult to imagine prices rising for much longer. I suspect they will fall in 2022, as the pandemic payback bill kicks in and the energy crisis bites."

Russell Galley, managing director of Halifax, said: “Looking ahead, the prospect that interest rates may rise further this year to tackle rising inflation and increasing pressures on household budgets suggest house price growth will slow considerably.

“Our expectation is that house prices will maintain their current strong levels, but that growth relative to the last two years will be at a slower pace. However, there are many variables which could push house prices either way, depending on how the pandemic continues to impact the economic environment.”

Erin Yurday

Erin Yurday is the Founder and Editor of NimbleFins. Prior to NimbleFins, she worked as an investment professional and as the finance expert in Stanford University's Graduate School of Business case writing team. Read more on LinkedIn.