According to a report by Nationwide Building Society, annual house price growth accelerated last month, from 11.2% in January. This was the seventh consecutive monthly increase in house prices
The average price of a house in the UK has risen to £260,230, recording a price growth increase of 12.6% in February.
According to a report by Nationwide Building Society, annual house price growth accelerated last month, from 11.2% in January. This was the seventh consecutive monthly increase in house prices.
Read more: UK house prices – average increases again.
“The price of a typical home rose above £260,000 for the first time in February, an increase of £29,162 over the past 12 months. This is the largest ever annual increase in cash terms since the start of our monthly index in 1991.
The price of a typical home is now £44,138 (20%) higher than in February 2020 – the month before the pandemic struck the UK,” Robert Gardner, Nationwide’s chief economist, said.
Read more: UK house prices hit another record high in December 2021.
Gardner said that a combination of robust demand and limited stock of homes on the market has kept upward pressure on prices.
“The continued buoyancy of the housing market is a little surprising, given the mounting pressure on household budgets from rising inflation, which reached a 30-year high of 5.5% in January, and since borrowing costs have started to move up from all-time lows in recent months,” he said. “The squeeze on household incomes is set to intensify, with inflation expected to rise above 7% in the coming months.”
Amanda Aumonier, mortgage operations head at online mortgage broker Trussle, said that the next few months of house price growth will be intrinsically linked to the overall economic picture.
“As people take stock of their current financial situation and manage the increased cost of living, this could impact the pipeline of homebuyers, decreasing the demand on property and the likelihood of bidding wars which could, together, halt any further growth in house prices,” Aumonier said.
“While many will see the Bank of England’s proposal to abandon rules which force lenders to apply strict stress tests to borrowers as a step closer to their dream home, it is important to be cautious of today’s climate – ultimately this could lead to a further stretch on homeowner finances.”
Karen Noye, mortgage expert at Quilter, said that the prospect of rising inflation and rising interest rates will also “take the wind out of the sails of the market” and finding cheap mortgage deals will become more difficult.
“Those who have already secured a fixed rate mortgage may well be grateful they have. For those looking to buy, increased rates are likely to make a house move, or the purchase of a first home, that much more unaffordable… Until housing stock is meaningfully replenished by the government and the big housebuilders, house prices will remain high as there is simply still too much demand and too little stock,” Noye said.
