As we head into summer, the speed of the UK property market is showing no signs of slowing. According to a Halifax survey released this month, it intensified massively in March, with a house price growth of an astonishing 1.4%, which is the highest figure we have seen in six months. *
The average house price in the UK has reached a new high of £282,753, as a result of this steep surge in the market. This means house prices have climbed by £43,577 in the last two years since the initial lockdown. *
The southwest of England has surpassed Wales as the UK’s best performing regional market in terms of annual house price inflation, with a rate increase of 14.6%, the most since September 2004. The average house price in the region has hit a new high of £298,162. *
This is the first time that Wales has not had the UK’s highest annual growth rate since January 2021. House price inflation remains extraordinarily high, at 14.1%. The UK average house price has hit £211,942, which is another all-time high. *
Property prices in Northern Ireland are likewise rising, with an average price of £177,265 and an annual growth rate of 13%. *
Scotland has also seen a house price increase, reaching a new high of £194,621, with an annual growth rate of 8.2%. *
The Southeast also had a significant gain, with an average price of £385,790 and an increase of 11.6%. The region’s prices have also climbed by £40,188 in the last year, which is the first time any English region outside of London has seen a £40,000-plus increase in a single year. *
London’s current house price increase trend is continuing, with prices now up 5.9% year on year with an average price of £534,977. *
Despite the likelihood of further financial strain on individuals, the explanation behind such high house price inflation remains unchanged: limited supply and great demand. Despite evidence of more homes entering the market, the basic problem remains that there are too many buyers chasing a small number of properties. The effect on house prices makes it more difficult for first-time buyers to get onto the property ladder, but it also presents a difficulty for movers who must make an increasingly larger leap to get their first home.
But, in the long run, we know that the housing market’s performance is closely tied to the overall health of the economy.
There is little doubt that real incomes are being squeezed in households, and the dilemma for policymakers in needing to stimulate the economy while also controlling inflation has become even more acute as a result of the impact of the Ukraine conflict.
As a result, buyers must contend with the risk of rising borrowing rates as well as a greater cost of living. These considerations should contribute to a slowing in house price rises over the coming year, given that affordability criteria are already very stretched.
There is no sign of a slowdown in the UK property market any time soon, meaning house prices are continuing to be driven up even further.
If you’re looking to take advantage of the surge in UK house prices, contact one of our expert estate agents today.
*According to a recent report from Halifax.
