Report bares all on latest house prices
The average house price in England and Wales has continued to increase over the first five months of the year on a near straight-line basis, highlighting the strength of underlying demand and confounding all predictions of a slowing growth rate.
The latest e.surv House Price Index for England and Wales found that average price paid for a home in England and Wales in May 2022 was £373,471, up some £3,750, or 1%, on the average price paid in April.
This sets yet another new record level for England and Wales – and for the seventh time in the last eight months.
Prices are now around £57,600, or 18.2% above March 2020 levels, at the start of the pandemic.
“The performance of house prices in England and Wales reminds us of the old maxim that records are made to be broken. It absolutely makes clear what an impact a sudden, pandemic driven, rise in demand has had on a lack of supply issue that has been with us for the last 20 or so years,” Richard Sexton, director at e.surv, commented.
e.surv reported that all 10 GOR areas experienced rising prices over the last 12 months, with nine of the 10 setting new record average house prices in April 2022, the one exception being the East of England, where prices in Essex, the largest component part of the East of England in terms of house sales, fell by 0.3% in the month.
Wales remains the GOR area with the highest annual growth rate, a position it has now held for 10 months. Twenty-one of the 22 local authority areas in Wales have seen prices increase over the period, the one exception being Denbighshire.
In second place is Greater London, where prices over the past 12 months have risen by 11.1%.
Sexton remarked that “London’s fortunes are clearly reflected in the story of the pandemic too.”
“During the pandemic’s peak, price growth in London had been the lowest of all the areas as purchasers raced for space further afield. However, from March this year and the onset of hybrid working, we began to see that buyers were moving back into central London and its commuter belts,” he noted.
“London is also benefitting from a bounce back from returning overseas buyers. This has resulted in an increased level of purchases.”
Read more: London property market – international interest returns.
e.surv also observed that detached properties had the highest rates of growth over this period, with semidetached and terraced properties both having lower rates, broadly similar to each other. Also evident are the far lower rates of price growth – frequently negative – associated with flats over this same period.
However, there is some evidence that the price of flats is once again beginning to climb. In part, this is due to the return of workers into urban areas, as the requirement to ‘work from home’ is no longer part of government policy.
Read more: Demand for city rentals high as workers return to offices.
The report noted that from the start of the pandemic in March 2020, more pronounced changes can be seen in homebuying behaviour, as housing transactions in April 2020 plummeted, followed by a return in housing sales as confidence began to re-build.
This then turned into a period when sales exceeded previous levels, as ‘lifestyle’ changes resulted in an increase in demand for homes, especially those with space to allow for ‘working from home.’
“The economic headwinds that grab so many headlines are being offset by a systemic lack of supply, full employment, wage increases and, for some at least, the savings that have been amassed over the last two years from changes in working patterns. The growth in single person dwellings too have had an impact on availability of property,” Sexton concluded.
The e.surv Acadata House Price Index for England and Wales uses the actual price at which every property in England and Wales was transacted, including prices for properties bought with cash, based on the factual Land Registry data as opposed to mortgage-based prices, asking prices or prices based on samples.
