UK house prices increased by 10.0% in the year to November 2021, up from 9.8% in October 2021. On a non-seasonally adjusted basis, average house prices in the UK increased by 1.2% between October and November 2021, compared with an increase of 1.0% during the same period a year earlier (October and November 2020).

Jan 2022 Data: £629,286 MoM -1.2% / YoY +4.2%

Average UK property price hits a new record high of £276,091 • House prices have increased by over £24,500 in 2021, the largest annual cash rise since March 2003 • House price growth in 2022 expected to slow

'Real' inflation adjusted house prices in the UK grew from Q4 2020 (£245,906) to Q4 2021 (£253,113) by 2.93%

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said: “Annual house price growth remained in double digits in December at 10.4%, making 2021 the strongest calendar year performance since 2006. Prices rose by 1% month-on-month, after taking account of seasonal effects. “The price of a typical UK home is now at a record high of £254,822, up £23,902 over the year - the largest rise we’ve seen in a single year in cash terms. Prices are now 16% higher than before the pandemic struck in early 2020. “Demand has remained strong in recent months, despite the end of the stamp duty holiday at the end of September. Mortgage approvals for house purchase have continued to run above pre-pandemic levels, despite the surge in activity seen earlier in the year. Indeed, in the first 11 months of 2021 the total number of property transactions was almost 30% higher than over the same period of 2019. “At the same time, the stock of homes on the market has remained extremely low throughout the year, which has contributed to the robust pace of price growth. Will the market cool in 2022? “It appears likely that the housing market will slow next year, since the stamp duty holiday encouraged many to bring forward their house purchase in order to avoid additional tax. The Omicron variant could reinforce the slowdown if it leads to a weaker labour market. Even if wider economic conditions remain resilient, higher interest rates are likely to exert a cooling influence. Indeed, house price growth has outpaced income growth by a significant margin over the past 18 months and, as a result, housing affordability is already less favourable than before the pandemic struck. “However, the outlook remains extremely uncertain. The strength of the market surprised in 2021 and could do so again in the year ahead. The market still has significant momentum and shifts in housing preferences as a result of the pandemic could continue to support activity and price growth. Indeed, the Omicron variant could serve to reinforce the shift in preferences in the near term.

The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. At its meeting ending on 15 December 2021, the MPC voted by a majority of 8-1 to increase Bank Rate by 0.15 percentage points, to 0.25%.

If you have been given a sub inflation rate pay rise at work, it is infact a pay cut, as your purchasing power will be diminishing.