"Brokers and lenders are handling record levels of activity, while also managing tough lockdown restrictions and a rise in the number of borrowers affected financially by the virus."
Average house prices increased over the year by 7.5% in England to £267,000, 9.6% in Wales to £179,000, 6.9% in Scotland to £164,000, and 5.3% in Northern Ireland to £148,000.
The North West was the English region which saw the highest annual growth in average house prices at 12.0%. This is the highest annual growth rate the North West has seen since June 2005.
The lowest annual growth was in the West Midlands, where average prices increased by 4.7% over the year to January 2021, down from 8.6% in December 2020.
Cloe Atkinson, managing director of The Mortgage Engine, commented: “The rise in house prices in January reflects a busy start to the year for the market, which has been made busier by the recently extended stamp duty holiday. The figures are also further proof that the housing market has adapted fully to operating during the pandemic, even in lockdown conditions. Brokers and lenders are handling record levels of activity, while also managing tough lockdown restrictions and a rise in the number of borrowers affected financially by the virus.
“A large part of this success is due to the adoption of various tech-driven solutions, from remote house viewings to more widespread use of automated valuation models (AVMs). With the support of technology, lenders have been able to provide for their customers throughout the pandemic. Technology has provided versatility and resilience for the market and this is part of the reason why the industry needs to embrace tech solutions, sooner rather than later. With property prices buoyant and the market in good health, it’s time for the industry to invest in this tech now, rather than playing catch-up later.”
Rich Horner, head of individual protection at MetLife, added: “The market is finally breathing a sigh of relief with today’s data showing strong house price growth, that will only continue to be fuelled by the Chancellor’s move to extend the stamp duty holiday. For the next few months, at least, buyers will be encouraged to continue their property search and make moves before June. There still remains an element of worry around what the second half of the year looks like as the property market, and society more broadly, returns to a level of normality after more than a year of lockdown. But pent up demand and a supply shortfall will work in the favour of sellers to buoy property prices.
“However, at the lower end of the market a level of reservation could move in. For a significant number the events of the past twelve months have left them in an ambiguous financial position. As a result, homeowners really need to consider the current levels of protection they have in place, particularly as one in seven (14%) homeowners say they regretted not previously having mortgage protection in place before the pandemic. And two in five (43%) say they are concerned about making their monthly mortgage repayment. So, even with the lure of the stamp duty holiday, it is imperative that buyers consider their financial position in the longer term and are protected against unforeseen illness and accidents that could have a significant impact on being able to meet their mortgage commitments.”
