Britain's house price boom: How much is your home worth?
Most expensive house prices EVER: How YOUR home’s value increased by £33,000 in one year as prices hit an all-time record in Britain – but experts say the boom can’t go on
- Average house price in the UK climbed to record high of £265,312 in March
- Growth dwindles in London but East Anglia, Wales and South West see big gains
- Economists had previously had gloomy predictions for house prices in 2022
Average house prices across Britain soared to record highs in March as new figures reveal a typical home now costs more than £265,000.
The analysis, supplied by Nationwide Building Society, showed a £33,000 increase in year-on-year figures, reiterating the enduring resilience of brick and mortar.
Property prices in all corners of the UK have soared, in some cases by more than 15 per cent in the last year, despite a looming cost of living crisis set to hit Brits’ wallets.
While growth appears to be dwindling in the capital, other regions across the country have seen prices continue to skyrocket this month.
London recorded an increase of 7.4 per cent, as the average price of a home soared above the half million mark (£518,333).
Meanwhile, East Anglia (14.2 per cent), Wales (15.3 per cent) and the South West (14.4 per cent) count among those with the highest percentage increases over the last year.
Economists had predicted house price hikes would slow in 2022, but property values grew by 14.3 per cent annually – the fastest pace of increase in the last 18 years.
Nationwide said the average value of a detached home has increased by £68,000 since early 2020, while the average price of a flat has increased by £24,000.
Average house prices across Britain soared to record highs in March as new figures reveal a typical home now costs more than £265,000. While growth appears to be dwindling in the capital, other regions across the country have seen prices continue to skyrocket
Property prices in all corners of the UK have soared, in some cases by more than 15 per cent in the last year, despite a looming cost of living crisis set to hit Britons’ wallets. [File picture]
Experts say competitive mortgage rates, low levels of housing stock and a change in spending habits during the pandemic have all contributed to soaring home prices.
Nationwide added that it is becoming harder for homeowners to trade up, with price gaps between different property types also moving to record highs.
Robert Gardner, Nationwide’s chief economist, said: ‘March saw a further acceleration in annual house price growth to 14.3%, the strongest pace of increase since November 2004.
‘Prices rose by 1.1% month on month, after taking account of seasonal effects, the eighth consecutive monthly increase.
‘The price of a typical UK home climbed to a new record high of £265,312, with prices increasing by over £33,000 in the past year. Prices are now 21% higher than before the pandemic struck in early 2020.
‘The housing market has retained a surprising amount of momentum given the mounting pressure on household budgets and the steady rise in borrowing costs.
EAST ANGLIA – £277,332 (+14.2%)
EAST MIDLANDS – £227,332 (+13.5%)
LONDON – £518,333 (+7.4%)
NORTH EAST – £153,029 (+10.6%)
NORTH WEST – £204,511 (+12.4%)
NORTHERN IRELAND – £171,095 (+11.1%)
OUT SOUTH EAST £337,094 (+12.8%)
OUTER METROPOLITAN – £422,428 (+11.4%)
SCOTLAND – £178,289 (+12.0%)
SOUTH WEST – £300,936 (+14.4%)
YORKSHIRE AND THE HUMBER £199,235 (+13.5%)
WALES – £201,502 (+15.3%)
WEST MIDLANDS – £233,136 (+11.7%)
‘The number of mortgages approved for house purchase remained high in February at around 71,000, nearly 10% above pre-pandemic levels. A combination of robust demand and limited stock of homes on the market has kept upward pressure on prices.
‘The continued buoyancy of housing demand may in part be explained by strong labour market conditions. The unemployment rate has continued to trend down in recent months from already low levels. Wage growth has accelerated, though it is running below inflation.
‘The significant savings accrued during lockdowns is also likely to have helped prospective homebuyers raise a deposit.
‘We estimate that households accrued an extra (around) £190 billion of deposits over and above the pre-pandemic trend since early 2020, due to the impact of Covid on spending patterns.
‘This is equivalent to around £6,500 per household, although it is important to note that these savings were not evenly spread, with older, wealthier households accruing more of the increase.
‘Nevertheless, we still think that the housing market is likely to slow in the quarters ahead.
‘The squeeze on household incomes is set to intensify, with inflation expected to rise further, perhaps reaching double digits in the quarters ahead if global energy prices remain high.
‘Moreover, assuming that labour market conditions remain strong, the Bank of England is likely to raise interest rates further, which will also exert a drag on the market if this feeds through to mortgage rates.’
Nationwide said the average value of a detached home has increased by £68,000 since early 2020, while the average price of a flat has increased by £24,000.
Alex Lyle, director of estate agency Antony Roberts, said: ‘Prices continue to rise in the family house market in particular, with large numbers of viewings, multiple offers and sealed bid scenarios all common. Ambitious or inflated pricing of flats means they can easily get stuck.’
Nationwide’s figures also show Scotland recorded a 12% year-on-year rise in house prices in the first quarter of this year, marking the strongest rate of growth since the third quarter of 2007.
Mr Gardner added: ‘Consequently, it is becoming more difficult for existing homeowners to trade up, with the price gaps between different property types now at a record high.
‘This is particularly acute for those looking to move from flats to terraced houses, where the price gap has more than doubled since the onset of the pandemic (from around £12,000 to over £25,000).’
Tom Bill, head of UK residential research at Knight Frank, said: ‘Despite the exceptionally strong growth seen over the last year, a housing market slowdown is in the post.
‘The cost-of-living squeeze and rising mortgage rates will undoubtedly take their toll on demand later this year. As we move beyond Covid and supply builds, this will also mean that house price growth becomes less eyebrow-raising.’
Leading the pack: Wales saw the highest rise in average house prices (£201,502), and increase in 15.3 per cent. Pictured is the town on Conwy
London meanwhile saw the smallest percentage increase at 7.4% as the cost of a typical home in the capital hit £518,333. File photo of a residential area in Kensington
Meanwhile, economists at Pantheon Macroeconomics said that March probably marks the peak for house price growth.
Karen Noye, mortgage expert at Quilter, said: ‘While house prices so far appear undeterred, the challenging circumstances we are currently facing may finally see the start of a slowdown.’
Mike Scott, chief analyst at estate agency Yopa, said: ‘The housing market cannot ignore the wider economy forever and we expect a slowdown in the second half of the year, but no significant falls in prices.’
Andrew Montlake, managing director of mortgage broker Coreco, said: ‘Yes, the jobs market is strong but the once-in-a-generation cost of living crisis and rising interest rates will almost certainly start to calm activity levels in the months ahead.
‘However, average property values are unlikely to fall materially as mortgage rates are still very competitive and supply levels are obscenely low.’
Guy Gittins, CEO of Chestertons, said: ‘Not even half way into March we had already witnessed a spike in buyer enquiries and sales compared to the same time period last year.’
Jason Tebb, from property search website OnTheMarket.com, said: ‘As we approach Easter we’re seeing an uptick in new homes coming to market, as you’d expect for this time of year.
‘However, this time around appetite from buyers is stronger as the historic lack of stock means demand is still outweighing supply.’
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