United Kingdom: Housing market stays red-hot at start of 2022
According to the Nationwide Building Society, house prices in the United Kingdom rose 0.8% month-on-month in January, following December’s 1.1% rise. On an annual basis, house price growth was 11.2%, above December’s 10.4% increase. House prices in January likely continued to be buoyed by tight home supply, a strong labor market and changes in housing preferences due to the pandemic. However, looking forward, likely monetary tightening by the Bank of England should take some steam out of property price growth.
On the outlook, Robert Gardner, Nationwide’s chief economist, said:
“It is likely that the housing market will slow this year. House price growth has outstripped earnings growth by a wide margin since the pandemic struck and, as a result, housing affordability has become less favourable.”