House prices have surged by 10% in a year

The housing market has ‘defied expectations’ with prices soaring 10 per cent in the year to November, official figures revealed yesterday.

experts had predicted that the housing market would cool down when the stamp duty holiday ended in September.

But cheap mortgages, a low supply of properties and high demand from families seeking extra space after lockdown have continued to push up asking prices.

The average property price in November was £271,000, which was £25,000 more expensive compared with the same month in 2020. Prices also rose month-on-month, and were 1.2 per cent higher than in October.

The price of a typical detached property jumped by 13.9 per cent to £428,134 in the 12 months to November, according to the Office for National Statistics (ONS). By comparison, the average flat increased in value by just 5.6 per cent to £223,078.

Myron Jobson, of Interactive Investor, said: ‘The UK housing market defied expectations in 2021, and recent data shows that it is off to a flying start this year.

‘however, the cost-of-living squeeze will hit savings and could hamper potential market growth.’

Newbuild homes also rocketed in value, with prices rising by more than a fifth in a year.

experts said this was down to the Government-backed help to buy scheme, which helps borrowers with small deposits purchase new properties. Sarah Coles, of hargreaves Lansdown, said: ‘The house of Lords recently criticised the help to Buy equity loan scheme, saying that by helping people borrow more, it meant developers could hike their prices, artificially inflating the market.

‘It calculated that in more expensive areas, it inflated the cost of homes more than it saved buyers through the subsidy, so was a waste of money.’

The South West recorded the largest increase in November, with house prices up 12.9 per cent annually.

London remained the weakest area for growth, with prices rising 5.1 per cent over the year. But at more than half a million pounds, it is still by far the most expensive place to buy a home.

Wales was the only area to see house price growth dip between October and November – but prices are still up 12.1 per cent compared to November last year, the ONS figures showed.

While experts predict that prices will cool in the months ahead as the cost of living crisis squeezes buyers’ budgets, a lack of supply of homes for sale could continue to see them rise this year.

‘This year is off to a flying start’