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UK house prices posted their highest year since 2006, driven by strong demand, stamp duty relief and a housing shortage in the market.
Lender Nationwide reported that annual house price growth rose to 10.4% in December, from 10.0% in November. This is the fastest growth in a calendar year since 2006.
Prices jumped 1% in December. The price of a typical UK house has now hit £ 254,822 for the first time on the Nationwide Index. That’s an increase of almost £ 24,000 over the year; the largest increase observed in a single year, in terms of liquidity.
Prices are now 16% higher than before the pandemic struck in early 2020, says Robert Gardner, Nationwide chief economist.
“Demand has remained strong in recent months, despite the end of the stamp duty holiday at the end of September.
Mortgage approvals for home purchases continued to exceed pre-pandemic levels, despite the sharp increase in activity seen earlier in the year. Indeed, in the first 11 months of 2021, the total number of real estate transactions was almost 30% higher than in the same period of 2019.
At the same time, the housing stock in the market remained extremely low throughout the year, which contributed to the sustained pace of price growth.
Separate data from Halifax overnight showed the “space race” among homebuyers has pushed prices up in some UK cities by about a fifth this year, with Taunton leading the way list of areas with the highest increases.
Also coming today
European stock markets are poised to take off in a mixed bag as the Omicron boom in business weighs on investors’ minds.
Yesterday, the UK’s FTSE 100 hit a 22-month high, finally returning to pre-crash levels in February 2020 as trading resumed after the Christmas holidays.
On Wall Street, the S&P 500 Index hit its 70th record at the close of 2021, as the traditional Santa Rally rallied stocks.
Naeem Aslam of Avatrade said:
Futures in the United States are trading flat, those in Europe are down, and major stock indexes are poised to end the year on a high note. Investors are delighted that Santa Claus blessed the markets this year, allowing the Dow Jones and S&P 500 to end yesterday’s session at historic highs.
Overall, investors are delighted that we are ending 2021 on a high note after a brutal 2020. virus.
However, the aggressive reduction in quantitative easing measures by the Federal Reserve to control inflation could be a major factor in stock market volatility in 2022.
The latest weekly US jobless claims data from 2021 will show the health of the US labor market.
- 7:00 GMT: National House Price Index for December
- 08:00 GMT: Spanish inflation data for December
- 13:30 GMT: weekly unemployment data in the United States