UK annual house price growth rose to 5.7% in March bringing average house prices up 0.8% over the month to £200,251, Nationwide’s index shows.
UK annual house price growth rose to 5.7% in March bringing average house prices up 0.8% over the month to £200,251, Nationwide’s index shows.
Robert Gardner, Nationwide's chief economist, said: “This is the strongest pace since February 2015 up from 4.8% the previous month.
“There has been a pickup in housing market activity in recent months, with the number of housing transactions and mortgage approvals rising strongly.
“This is likely to have been driven, at least in part, by upcoming changes to stamp duty on second homes, where buyers have brought forward purchases in order to avoid the additional tax liabilities.”
Gardner warned that the uplift was a “temporary boost to demand” which set against a backdrop of continued constrained supply is likely to have exerted upward pressure on prices and helped to lift the pace of annual price growth out of the fairly narrow range of 3%-5% that has been prevailing since the summer.
He added: “The pace of house price growth may moderate again once the stamp duty changes take effect in April.
“However, it is possible that the recent pattern of strong employment growth, rising real earnings, low borrowing costs and constrained supply will keep the demand/supply balance tilted in favour of sellers and maintain pressure on price growth in the quarters ahead.”
Jeremy Duncombe, director of the Legal & General Mortgage Club, warned that Britons were facing an affordability crisis.
He said: “As house prices continue their unrelenting year on year climb, prospective buyers are suffering the consequences of wage growth and inflation not keeping pace.
“As a result, more people are struggling to save the money required for a deposit quickly, putting the goal of home ownership out of reach for many.
“This issue, combined with the country’s current housing shortage, will only add to the affordability crisis we are experiencing across the UK.”
Duncombe also suggested that the government’s “plethora” of house-building programmes over recent years has only aided in the construction of an average of 145,000 new homes a year since 2010, far short of the government’s own targets of 250,000 homes a year.[
He said: “In order for the issue of affordability to be addressed in a meaningful and sustainable way, we need to see tangible results when it comes to confronting the supply side deficit, instead of just further stimulus on the demand side.”
