House prices continued to climb in the latter months of 2021, with the average UK home now worth nearly £273,000. The figures, released by Halifax, mark the highest quarterly house price inflation rates since 2006.

Although house prices in Wales showed the biggest increases overall, in England, the North West remained by far the strongest performing region with an annual house price increase of 11.4% to November 2021. A shortage of available properties, continuing low mortgage rates and a relatively buoyant labour market are thought to be amongst the key drivers behind the growth. The Stamp Duty holiday, which ran in full through to the end of June 2021, and then ended in its tapered form in September 2021, also played a significant role.

Overall, since the start of the first lockdown in March 2020, house prices across the UK have risen by an average of £33,816. Interestingly, compared to figures from 2020, which showed the biggest increase in detached homes, flats were the strongest performer in 2021, with an average increase of 10.8%.

Whilst the news of house price increases in the North West may come as welcome news to some, especially those with second homes or rental properties in the region, it could be worrying for other types of buyer.

The figures come as it is revealed that the cost of a home for a first-time buyer now represents up to five-and-a-half times their typical annual earnings. The figures, from Nationwide Building Society, found that to achieve a 20% deposit on a home, a first-time buyer would need 110% of their average pre-tax income. The North West average first-time buyer house price-to-earnings ratio was reported at 4.2.

There are many factors at play currently in the property market – with the prospect of further increases to interest rates in the New Year being perhaps the most significant. Despite this, the residential property market in the North West is set to remain strong into 2022.

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