UK house price surge revealed – ONS figures released

House prices increased by 9.6% over the year to January 2022, according to the latest House Price Index by the Office for National Statistics (ONS).

The average UK house price was £274,000, which is £24,000 higher than this time last year.

The highest growth was seen in Wales, where the average house price jumped by 13.9% to £206,000, followed by Scotland at 10.8% to £183,000.

In England, the average house price rose by 9.4% to £292,000, while Northern Ireland posted a 7.9% increase to £159,000.

London continues to be the region with the lowest jump at 2.2%. The reason for this, according to Mike Scott, chief analyst at estate agency Yopa, is that London workers were now able to live further from the city centre.

Read more: London revealed as the worst city for tenants working from home.

“They are now working more from home, and partly a continuation of a trend that started in 2016, with slower growth in London after its house prices had grown much more rapidly than the rest of the country for the previous several years,” Scott said.

Meanwhile, Karen Noye, mortgage expert at Quilter, noted that while there was still a slight uptick in month-on-month house prices, it seems inevitable that a slowdown and subsequent fall in house prices is on the horizon given the current fiscal pressures that the UK is facing.

 “Many people are already feeling the squeeze financially due to soaring inflation and the rising cost of living, leaving many feeling less financially stable than they were before,” Noye said. “Lenders are quick to pass on any rate rise to customers, so the increased costs will likely put off prospective buyers and buying a new home or taking the first step on to the property ladder will be pushed out of reach for many. As a result, we could see house prices dip over the coming months.”

Read more: Lenders must have adequate support in place as cost of living rises.

 Nathan Emerson, chief executive at Propertymark, said that while prices are still high right now, they will likely go down once supply matches the increasing demand.

“The amount of properties going for over the asking price is still a figure that’s over three times more than what we would see in a pre-pandemic market,” Emerson said. “However, what these ONS figures suggest is that the cost of living, energy prices and interest rates rising mean buyers are beginning to be more cautious with their cash. Our own data shows there are more properties entering the market, bringing signs of an equalising between supply and demand which will likely have a more stabilising effect on prices in the coming months.”

“The government figures are the most accurate, but also the most delayed measure of house price growth, and we expect that they will continue to show strong growth for most of 2022,” added Scott. “Even if we have a possible cooling-off in the market in the second half of the year, it will take several months for that slowdown to appear in this report.”