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U.K. Home Prices Logged Best January in 17 Years

Average values rose 11.2% year over year last month as robust demand and a housing shortage continue to drive growth

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U.K. property values surged more than 11% annually in January.

Getty Images
U.K. property values surged more than 11% annually in January.
Getty Images

One month into 2022, and U.K. home prices have recorded their strongest start to the year in almost two decades, according to data released Tuesday by Nationwide. 

Values rose 11.2% in January compared to a year earlier, leaving the average home price at a record £255,556 (US$345,236), nearly £26,000 more than January 2021, and almost £40,000 more than January 2020, the U.K. bank and mortgage provider said.

Last month’s annual gains marked “the strongest pace since June last year, and the strongest start to the year for 17 years,” Robert Gardner, Nationwide’s chief economist, said in the report. 

Robust demand—despite the end of the stamp duty holiday—underpin the country-wide price growth, according to Mr. Gardner.

The stamp duty holiday was introduced in the U.K. during the summer of 2020, and scrapped the transfer tax on the first £500,000 of a home sale with savings of up to £15,000 available to buyers. The holiday was gradually phased out and reverted back to the typical stamp duty system at the end of September 2021. 

Hand-in-hand with the healthy demand across the country is a severe shortage of homes for sale—another factor that’s helping fuel the “perfect storm” of housing market growth, according to Jonathan Samuels, CEO of London-based real estate lender Octane Capital.

“The nation’s estate agents can’t restock the shelves fast enough and the level of available properties remains insufficient when compared to the huge levels of buyer demand still sweeping the market,” he said. “As a result, it very much remains a seller’s market and buyers are still taking advantage of the low cost of borrowing to offer that little bit more in order to secure their favored property.”