"On average, home values are up £16,000 on the year, but our data shows that millions of homeowners have seen a larger uplift than this during the course of 2021."
With a 7.1% annual rise in house prices, the average home now has a market value of £240,800, the highest average price on record. This compares to £224,800 12 months ago.
While average UK house prices increased by £16,000 over the past 12 months, five million homes - approximately a fifth of the UK’s private housing stock, increased by more than £35,000.
Accelerated market activity has resulted in the total value of UK housing rising by £670bn in 2021 to £9.5 trillion.
House prices in nearly every region of the UK have risen this year by more than in 2019 and 2020 combined. Meanwhile average values are up by more than the last three years combined in four UK regions - the South East, South West, East of England and the North East, where prices have risen by £23,500, £23,000, £20,400 and £8,300 respectively in the last 12 months alone.
Buyer demand has shaped the property market’s narrative this year, running on average 15.7% higher than 2020 levels. Demand has been pronounced across the UK, but is currently running highest in the East Midlands (+42%), West Midlands (+35%) and Yorkshire (+28%).
Buyer activity culminated in June 2021, when more people moved into a new home than in any month since 2005 (when Zoopla's records began).
By contrast, the stock of homes has been depressed all year and currently is down by 33.2% - creating intense competition amongst buyers in the market and ultimately accelerating house price growth.
House price rises have increased household equity across the UK. Zoopla says these gains, coupled with homeowners looking for additional space, will underpin new supply pipelines and demand levels in Q1 2022.
It added that while the supply and demand imbalance is set to continue, a normalisation of the market in the first half of next year will allow the sales pipeline to start to rebuild.
Grainne Gilmore, head of research at Zoopla, commented: “This year has been a record year for the market, with the stamp duty holiday and the pandemic-led ‘search for space’ among homeowners resulting in the highest number of sales since before the financial crisis, with 1.5 million transactions.
“However such a busy market eroded the number of homes available to buy, as properties were being snapped up so quickly. This imbalance between demand and supply has put upwards pressure on prices. On average, home values are up £16,000 on the year, but our data shows that millions of homeowners have seen a larger uplift than this during the course of 2021.
”This uplift in equity may act as a spur for more households to consider a move in 2022, further boosting the seasonal post-Christmas bounce in activity that traditionally occurs before the New Year. “