Average UK house price ‘jumped £33,000 over last year’
The average price has risen by more than £33,000 over the past year, the Nationwide Building Society said. The company explained that in March 2021 the average house price in the UK was £232,134. Since then, property values have increased by 14.3% per year – the fastest rate of growth since 2004.
However, this price growth has caused difficulties for those looking to buy or sell property. In fact, Nationwide said it was becoming increasingly difficult for property owners to trade, with price differentials between different property types reaching an all-time high.
As Robert Gardner, Nationwide’s Chief Economist, put it: “March saw a further acceleration in annual house price growth to 14.3%, the fastest rate of increase since November 2004. Prices rose 1.1% month-on-month, after adjusting for seasonal fluctuations. effects, the eighth consecutive monthly increase.
“The price of a typical UK house has hit a new record high of £265,312, with prices rising by more than £33,000 in the past year. Prices are now 21% higher than before the pandemic in early 2020. The housing market has maintained surprising momentum given the mounting pressure on household budgets and steadily rising borrowing costs.
“The number of mortgages approved for the purchase of a home remained high in February at around 71,000, almost 10% above pre-pandemic levels. The combination of robust demand and a limited inventory of homes on the market kept upward pressure on prices.
“The continued strength in housing demand can be partly explained by good labor market conditions. The unemployment rate has continued its downward trend in recent months from already low levels. Wage growth accelerated, although below inflation.
“The significant savings during the closures also likely helped potential buyers raise a down payment. We estimate that households have accumulated (approximately) £190bn in additional deposits beyond the pre-pandemic trend since the start of 2020, due to the impact of Covid on spending patterns. This equates to around £6,500 per household, although it’s important to note that these savings were not evenly distributed, with older and wealthier households enjoying a greater share of the increase.
“Nevertheless, we still believe the housing market is set to slow over the next few quarters. The squeeze on household incomes is set to intensify, with inflation expected to rise further and perhaps reach double digits over the next few months. quarters if global energy prices remain high.
“Furthermore, assuming labor market conditions remain strong, the Bank of England will likely raise interest rates further, which will also have a dampening effect on the market if this spills over to mortgage rates. “
Nationwide said the average value of a detached house has risen by £68,000 since the start of 2020, while the average price of a flat has risen by £24,000.
Mr Gardner said: “As a result, it is becoming more difficult for existing owners to trade, with price differentials between different property types now reaching an all-time high.
“This is particularly acute for those looking to move from flats to townhouses, where the price gap has more than doubled since the start of the pandemic (from around £12,000 to over £25,000). ”
Nationwide figures also show Scotland recorded a 12% year-on-year rise in house prices in the first quarter of this year, marking the highest rate of growth since the third quarter of 2007.
Here are the average house prices in the first quarter of this year across the UK and the annual increase, according to Nationwide:
- Wales: £201,502, 15.3%
- South West: £300,936, 14.4%
- East Anglia: £277,332, 14.2%
- Yorkshire and Humber: £199,235, 13.5%
- East Midlands: £227,275, 13.5%
- Outer South East (includes Ashford, Basingstoke and Deane, Bedford, Braintree, Brighton and Hove, Canterbury, Colchester, Dover, Hastings, Lewes, Fareham, Isle of Wight, Maldon, Milton Keynes, New Forest, Oxford, Portsmouth, Southampton, Swale , Tendring, Thanet, Uttlesford, Winchester, Worthing): £337,094, 12.8%
- North West: £204,511, 12.4%
- Scotland: £178,289, 12.0%
- West Midlands: £233,136, 11.7%
- Outer Metropolitan (includes St Albans, Stevenage, Watford, Luton, Maidstone, Reading, Rochford, Rushmoor, Sevenoaks, Slough, Southend-on-Sea, Elmbridge, Epsom and Ewell, Guildford, Mole Valley, Reigate & Banstead, Runnymede, Spelthorne, Waverley, Woking, Tunbridge Wells, Windsor and Maidenhead, Wokingham): £422,428, 11.4%
- Northern Ireland: £171,095, 11.1%
- North East: £153,029, 10.6%
- London: £518,333, 7.4%
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