Limited supply and strong demand
Average UK house price up £44,000 since first lockdown
House prices reach new high
The average UK house price has reached a new high of £282,753, which is almost £44,000 higher than the first lockdown two years ago, reports Halifax.
According to the latest Halifax House Price Index, average house prices are up by £43,577 since the first lockdown in March 2020.
The annual rate of house price inflation for March 2022 was put at 11 per cent, which is the highest since mid-2007, and this is equivalent to a year-on-year rise of £28,113.
House prices increased by 1.4 per cent in March, which is £3,860 in cash terms; Halifax said this was the largest increase since September and the ninth month in a row that average house prices have risen.
It said the pandemic’s impact on demand from buyers was notable in the price premium on different properties, with flats increasing by 10.6 per cent, or £15,404, over the last two years.
This compares to detached properties, offering more space, which has gone up 213 per cent, or £77,717 over the same time period.
Russell Galley, managing director at Halifax, said: “The story behind such strong house price inflation remains unchanged: limited supply and strong demand, despite the prospect of increasing pressure on household finances.”
He said that despite there being some evidence that more homes were coming on to the market, the “fundamental issue” was that there were more buyers competing for fewer properties.
“The effect on house prices makes it increasingly difficult for first-time buyers looking to make their first step onto the ladder, but also challenges home movers who face ever bigger leaps to move up the rungs to a larger property,” he explained.
Galley said that in the long-term the housing market was linked to wider economic health.
“There is no doubt that households face a significant squeeze on real earnings, and the difficulty for policymakers in needing to support the economy yet contain inflation is now even more acute because of the impact of the war in Ukraine,” he said.
He added that buyers were having to deal with the prospect of higher interest rates and higher cost of living, and due to affordability metrics being “already extremely stretched”, there could be a house price inflation slowdown over the next year.
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