House prices see fastest growth rate in January for 17 years

house prices

House prices have risen at the fastest annual pace for a January in 17 years, amid “robust” demand and low supply, according to lender Nationwide.

The building society said prices rose by 11.2% year-on-year and by 0.8% between December and January.

However, the Nationwide predicted the market would slow this year as buying property becomes less affordable.

It added that with interest rates expected to rise in the coming months affordability would be further hit.

The average price of a property in the UK was £255,556 in last month – up from £254,822 in December.

“Mortgage approvals for house purchase have continued to run slightly above pre-pandemic levels, despite the surge in activity in 2021 as a result of the stamp duty holiday, which encouraged buyers to bring forward their transactions to avoid additional tax.

“Indeed, the total number of property transactions in 2021 was the highest since 2007 and around 25% higher than in 2019, before the pandemic struck.

“At the same time, the stock of homes on estate agents’ books has remained extremely low, which is contributing to the continued robust pace of growth for house prices.”

'Dampen activity'

Mr Gardner said the outlook for the housing market “remains uncertain”, but house price growth had “outstripped earnings growth by a wide margin since the pandemic struck and, as a result, housing affordability has become less favourable”.

He singled out the impact on first-time buyers. “A 10% deposit on a typical first-time buyer home is now equivalent to 56% of total gross annual earnings, a record high.

“Similarly, a typical mortgage payment as a share of take-home pay is now above the long run average, despite mortgage rates remaining close to all-time lows.”

He said reduced affordability would be likely to dampen market activity and house price growth this year “especially since household finances are also coming under pressure from sharp increases in the cost of living”- with inflation hitting 5.4% in December, its fastest pace since 1992, and set to rise further in the coming months as energy prices go up.

High inflation has contributed to the expectation that interest rates, which were increased to 0.25% in December, will go up further in the coming months. The Bank of England’s Monetary Policy Committee is due to make its next announcement on rates on Thursday.

“This will further reduce housing affordability if it feeds through to higher mortgage rates, although to date a significant proportion of the rise in longer term interest rates seen in recent months has been absorbed by lenders,” Mr Gardner said.

It really is a great time to sell

If you have thought about moving it really is a good time to sell!

With the average price of a family home in the UK being £255,556 in the last month – up from £254,822 in December along with:
  • Housing demand remaining robust
  • Mortgage approvals continuing to be high
  • The highest no of properties transactions in 2021 since 2007.

If you have thought about moving, then take advantage of these strong conditions and let us help you make your move in 2022!

Get in touch to arrange your free market appraisal or to book an appointment with our Independent Mortgage Adviser.

Give us a call on 01257 451673 or email us at

Every member of our team lives in the local area, we know the local market so if you are looking for advice then please do give us a call.