New figures from Nationwide Building Society show the typical price of a home in Britain stood at £254,822 in December – up £23,902 over the past year and a new record high

The average price of a UK is now almost £255,000
The average price of a UK is now almost £255,000

The price of the average home in the UK has surged by almost £24,000 during 2021 – the biggest ever increase in a single year in cash terms.

New figures from Nationwide Building Society show the typical price of a home in Britain stood at £254,822 in December – up £23,902 over the past year and a new record high.

Average UK house prices were up 10.4% annually, the high street lender said, as the property market boom continues.

In terms of a month-on-month increase, prices rose by a stronger-than-expected 1.0% in December from November.

Economists polled by Reuters had expected prices to rise by a monthly 0.5%.

This year was the biggest full-year rise for house price growth since 2006, said Nationwide – but experts predict the property market will slow in 2021.







New figures have been released by Nationwide Building Society
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Image:

Getty Images)

House prices have largely been stimulated by Chancellor Rishi Sunak announcing a stamp duty holiday in July 2020.

Stamp duty is a tax charged when you buy a property – although it is called “land and buildings transaction tax” in Scotland and “land transaction tax” in Wales.

In England and Northern Ireland, stamp duty is charged on all homes above £125,000, or homes above £300,000 for first-time buyers.

But the stamp duty holiday saw the tax break apply to homes that are worth up to £500,000 before it was slowly wound down and ended entirely on September 30.

The rate when stamp duty starts is £145,000 in Scotland, or £175,000 for first-time buyers, and £180,000 in Wales.

In Wales and Scotland, the stamp duty break was applied to homes worth up to £250,000.

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How we bought our first homes

Another reason that is thought to have pushed up prices is Covid making people reassess where they want to live due to working from home.

Before the stamp duty holiday was announced, the property market had stalled as estate agents began offering video house viewings to avoid face-to-face sales.

Robert Gardner, chief economist at Nationwide, said: “It appears likely that the housing market will slow next year, since the stamp duty holiday encouraged many to bring forward their house purchase in order to avoid additional tax.”

He continued: “The market still has significant momentum and shifts in housing preferences as a result of the pandemic could continue to support activity and price growth.

“Indeed, the Omicron variant could serve to reinforce the shift in preferences in the near term.”

We spoke to experts to get their views on what will happen to house prices in 2022 here.

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