House prices up by 6.9% in 2021 – the busiest UK market since 2007

The high number of buyers in the market, combined with a shortage of properties for sale, have pushed up the average cost of a UK home – but by how much?

According to Zoopla “pent up demand triggered by the pandemic leads to the busiest market for more than a decade as one in every 16 homes is set to be sold to new owners”. The “key takeaways” are:

• The average UK home now costs £240,000 compared with £200,000 just five years ago
• House prices rose at an annual rate of 6.9% in October, double the rate of 3.5% recorded in the same month of 2020
• Buyer demand is running 28% above the five-year average, but the number of homes for sale is 42% below it

One in every 16 privately-owned properties is set to change owners in 2021, making it the busiest year for the housing market since 2007.

The ongoing re-evaluation of homes triggered by the Covid-19 pandemic has continued to drive increased demand throughout the past year.

The high number of buyers in the market, combined with a shortage of properties for sale, has pushed up the average cost of a UK home to £240,000, compared with £200,000 five years ago, according to Zoopla’s latest House Price Index.

During the past year alone, the typical property has seen £15,500 added to its value, driven in part by buyer appetite for bigger homes, especially in commuter zones and rural areas.

Buyer demand is expected to remain strong going into 2022, but new supply is also likely to come on to the market, as households use the holiday period to make a decision about moving.

The proportion of buyers who are also sellers is expected to increase, helping to ease the shortage of supply.

Overall, house prices are expected to rise by 3% in 2022, while around 1.2 million homes are likely to change hands, down from an estimated 1.5 million this year.