Property Market Monitor: January 2021

UK annual house price growth continued to post multi-year record highs, ending 2020 at a six-year high of 7.3% growth year-on-year as illustrated in our chart of the month. According to the Nationwide House Price Index, UK house prices were up by an average of 5% year-on-year every single month between July and December last year. The data shows that at the end of last year, the average UK house was £15,638 more expensive than a year ago. The strength of the UK’s housing market in a year when an unprecedented pandemic led to a number of national and regional lockdowns has taken many by surprise. Overall, house prices ended the year 4.3% above the level prevailing in March, when the pandemic struck the UK.

Chart of the month: Monthly UK house price, annual % change

Source: Nationwide House Price Index, Blend Network

Market Commentary

• Annual house price growth rose to 7.3% in December, the highest rate since November 2014. This comes after several months of surprisingly strong housing market performance: in Q4 2020 for example, house prices increased by an average of 6.5% year-on-year every month leading to strong growth over the past decade.

• Looking at month-on-month price trends, prices were also up by 0.8% in December compared to November. September, October, November and December each saw prices grow by close to 1% every month compared to the previous month. According to Robert Gardner, Nationwide’s Chief Economist, housing demand has been buoyed by a raft of policy measures such as the furlough and Self Employment Income Support Schemes as well as changing preferences in the wake of the pandemic.

• The quarterly regional house price data also reveals some very interesting trends. The East Midlands was the strongest region in Q4 2020 and saw an 8.6% year-on-year growth. The West Midlands experienced a 7.5% year-on-year growth in the last quarter of last year. Overall, the East and West Midlands have been the two strongest UK regions since the Brexit referendum: both regions have seen close to 25% price increase between Q1 2016 and Q4 2020. The North West and Northern Ireland follow closely behind at 22.1% and 21.2% price increase respectively.

Figure 1: UK regional house prices (Index Q1 2015=100)

Source: Nationwide House Price Index, Blend Network

At Blend Network, we ended 2020 on a high note: the value of our loans listed were up by 104% compared to 2019. We have also kick-started a very busy year and welcome the Government’s move to keep the housing market open during the UK’s third national lockdown. So, keep an eye on www.blendnetwork.com as we have many loans coming soon that you won’t want to miss.  

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