Tuesday, 17 May 2022

UK house prices rise at fastest rate for 15 years

HOUSE prices are rising at an annual rate of 10.8 per cent, the fastest rate of growth since 2007, according to the Halifax.

However, the squeeze on household finances is expected to affect the property market later in the year.

Russell Galley, managing director of Halifax, said: “The UK housing market shrugged off a slightly slower start to the year with average property prices rising by another 0.5 per cent in February, or £1,478 in cash terms.

“This was an eighth successive month of house price growth, as the resilience which has typified the market throughout the pandemic shows little sign of easing. Year-on-year prices grew by 10.8 per cent, the fastest pace of annual growth since June 2007, pushing the average house price up to another record high of £278,123.

“Two years on from the start of the pandemic, average property values have now risen by £38,709 since February 2020. Over the last 12 months alone house prices have gained on average £27,215.

“Lack of supply continues to underpin rising house prices, with recent industry surveys showing a dearth of new properties being listed, now a long-term trend. This may be a particular issue at the larger end of the property market.

“Over the past year the average price of detached properties has risen at a rate more than four times that of flats, in cash terms.

“Looking ahead, as covid moves into an endemic phase and almost all domestic restrictions are removed, geopolitical events expose the UK to new sources of uncertainty. The war in Ukraine is a human tragedy, but is also likely to have effects on confidence, trade and global supply chains.

“Surging oil and gas prices are one immediate consequence, meaning that inflation in the UK — already at a 30-year peak — will remain higher for longer. This will add to the squeeze on already stretched household incomes.

“While increases in bank rate look likely in the near term, the extent of the rises will depend on how it affects prices and companies’ approaches to pay over the months to come.

“These factors are likely to weigh on buyer demand as the year progresses, with market activity likely to return to more normal levels and an easing of house price growth to be expected.”

Seven UK areas are now seeing double-digit annual house price inflation. London remains the weakest performing area of the UK, although it continued its recent upward trend with annual house price inflation now standing at 5.4 per cent, its strongest level since the end of 2020.


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