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Housing Market is The Busiest Since 2007
Published by Jessica Weisman-Pitts
Posted on December 21, 2021
3 min readLast updated: January 28, 2026
Global Banking & Finance Review®
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Published by Jessica Weisman-Pitts
Posted on December 21, 2021
3 min readLast updated: January 28, 2026
2021 marked the busiest year for the UK housing market since 2007, driven by high demand, rising prices, and the stamp duty holiday.
With a global pandemic taking over the world in the past 18 months, it might be surprising to hear that actually 2021 will have been the busiest year for the housing market since 2007.
There has been a frenzy of activity with 1.5 million house transactions and 1 in 16 homes changing hands by the end of December 2021.
Similar to 2007, there has been a huge increase in buyer demand over the last year but a lack of homes to fill that demand. This means that prices have risen almost 7 percent across the United Kingdom.
In Wales there has been a marked 10.8 percent growth but in London this is just 2.3 percent. Although different across the United Kingdom, there has been a rise in housing prices especially in areas which typically had lower prices to begin with.
Another reason why there has been a marked growth in prices over the past year was the stamp duty holiday. Introduced in July 2020 to help the housing market during the pandemic, the stamp duty holiday has done just that!
Buyers brought forward purchases earlier than they might have planned before the holiday finished in September.
Thanks to lockdown, estate agents are reporting that flats with no outside space are seeing a fall in demand with houses rising 8 percent in value compared to a 1 percent increase for flats.
However, as mentioned before the number of houses actually for sale is less than normal levels. It is possible that more houses come on the market as people assess their living situation over the festive period.
The Bank of England’s decision to cut interest rates to 0.1 percent in March 2020 was a huge factor in stimulating activity in the housing market over the past year.
This decision enabled borrowers to benefit from some of the cheapest mortgages ever seen.
This, of course, helped growth in property prices as borrowers could stretch themselves to afford bigger houses because they could have a sub 1 percent mortgage with five years and repayments would be way more affordable.
However, it is unclear how long this will continue with a soar in inflation making an increase in the interest rate looking likely. It may be February 2022 when interest rates are raised higher than 0.25% meaning 2022 might not be as prosperous for cheaper mortgages and borrowing.
Rising inflation is expected to normalise the housing market, household costs will be pushed higher.
However, there is still some optimism as lenders will still be keen to lend money and have money to do so which will hopefully mean that mortgage rates stay affordable and relatively cheap compared to past years.
This will hopefully stimulate activity in the housing market. Investor trends are also set to continue into the new year with property investors looking for new opportunities in 2022.
Bridging has become a common theme of the housing market over the last year. People are looking to get transactions done as quickly as possible, especially so that they could take advantage of the stamp duty holiday.
However, with so little stock available on the housing market these quick transactions are not going to go away. Buyers have to be quicker than ever if they want to secure their dream property.
A bridging loan allows purchases to turn into cash buyers and leapfrog the competition who are relying on traditional mortgage finance.
The article discusses the UK housing market's activity in 2021, highlighting increased demand and rising prices.
House prices rose due to high buyer demand, limited housing supply, and the stamp duty holiday.
Low interest rates enabled affordable mortgages, encouraging buyers to purchase larger homes.
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