British lenders approved more mortgages than expected in December, according to Bank of England data that underlined the post-lockdown strength of the housing market. It said that 71,015 mortgages were approved in December, up from 67,859 in November.
The housing market has had its strongest start to the year in 17 years, according to Nationwide.
Annual price growth increased to 11.2 per cent in January from 10.4 in December -the sixth consecutive monthly increase. Across the UK, the average house price in January was £255,556.
The lender has warned that the property market will slow this year. Its chief economist Robert Gardner said: "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. For example, a 10 per cent deposit on a typical first-time buyer home is now equivalent 56 per cent of total gross annual earnings, a record high."
Several factors combined in 2021 to drive demand for family homes. The pandemic 'search for space', the stamp duty holiday and changing working patterns for office-based workers all contributed to a strong focus on family homes, especially in the wider commuter zones and in rural areas.
As Zoopla forecast in early December, buyer demand bounced back strongly at the start of this year, up to 50% compared to usual levels for this time of year.
Demand for flats has also risen sharply.
The flats market outside London has been driven by the re-opening of offices, as well as more buyers considering the value of flats, with average flat prices up just 1.9% over the last year across the UK's 20 major cities. In contrast, the average value of a detached family home in these cities is up 8%. Agents have also reported increased interest from investors and homebuyers from overseas signalling some pent-up demand coming back.
Owners of mid-rise flats with dangerous cladding will no longer have to pay to have it removed from their homes.
The cost will now be passed on to developers and cladding manufacturers, according to the government.
Michael Gove, secretary of state for Levelling Up, Housing and Communities, published his letter to the building industry on January 10th.
In it, he requested that companies and industry bodies work together with the government on a "new deal" to fix the cladding crisis.
They have until early March to agree on a plan to fund and fix unsafe cladding on buildings of around four to six-storeys high.
The estimated cost of work to fix cladding on these buildings is £4bn.
The government is paying for cladding to be replaced on blocks of flats that are above 18m high.
"It is neither fair nor decent that innocent leaseholders should be landed with bills they cannot afford, to fix problems they did not cause," Gove said.
Nicky Burridge - Zoopla Property News
Everyone at Fox Estates would like to wish you a happy, healthy and prosperous New Year.
Let's hope that 2022 is kinder to us all.