UK house prices continue to “advance unrestrained,” and on average are “up £29,000” over the last year, according to an update shared by Blend Network, a specialist development finance lender.
The Nationwide House Price Index increased by 12.6% YoY in February 2022, which is an eight-months high, and “fast advancing towards last summer’s 17-year high.”
Compared to January 2022, prices surged by 1.7%, “the fastest monthly price rise since last summer.” According to Rightmove, the price of properties coming to the market “increased by 2.3% in February, up by £7,785 in just a month and the biggest monthly jump in pounds recorded by Rightmove in more than twenty years.”
The report posted by Blend Network also mentioned that the Halifax House Price index saw “a similarly robust trend in February: the 10.8% annual rate of growth was the strongest level witnessed since June 2007, pushing the average house price up to another record high of £278,123.”
According to the Halifax House Price index, the past twelve months “have witnessed the biggest one-year cash house price rise recorded in over 39 years of index history.’
According to Nationwide, “a combination of robust demand and limited stock of homes on the market has kept upward pressure on prices.” As noted in the update shared by Blend Network, this buoyancy has been described by Nationwide “as ‘a little surprising’ given the escalating pressure on household budgets from soaring inflation, which reached a 30-year high of 5.5% in January.”
The Halifax House Price Index “points out that two years on from the start of the Covid-19 pandemic, average UK property values have increased by £38,709 (+16%) since February 2020.”
This “shocking figure” is more than the average salary in the United Kingdom.
To put the price increase of the past two years into perspective, Rightmove “points out that average asking prices have risen by nearly £40,000 in the two years since the pandemic started, compared to just over £9,000 in the previous two years.”
Savills’ latest UK Housing Market Update reports that “the market remains hot as continued supply-demand imbalance fuels price growth.” They expect this “supply-demand imbalance will be the main short term driver of house price growth.”
Activity in the market remains high: “according to TwentyCi as reported in Savills’ latest UK Housing Market Update, property sales agreed in February were 31% above the 2017-19 average.”
Meanwhile, Bank of England data shows that mortgage approvals in January “were 12% above the 2017-19 average.”
So, demand “remains strong and there is still a large pool of buyers actively looking for new homes.”
As noted by Blend Network, last week the Bank of England (BoE) increased interest rates “for a third time in three months to 0.75%, with analysts expecting rates to hit 1% by the summer and 1.25% by year-end.”
The bank has been “under pressure to continue to tighten monetary policy to tame the dramatic surge in inflation that has been intensified by the war in Ukraine.”
