Annual house price growth accelerates to 15-year high
UK house prices are growing at their fastest rate since before the global financial crisis, according to Halifax, with the typical property racking up up its biggest annual cash gain in the nearly 40 years since the lender’s index began.
Prices last month were 10.8% higher than their level in February 2021, the highest annual growth rate since June 2007, as prices hit a new record high of £278,123.
Seven UK areas are now seeing double-digit annual house price inflation, highlighting not only the strength but the breadth of gains across the country.
Russell Galley, managing director at Halifax, said: “The UK housing market shrugged off a slightly slower start to the year with average property prices rising by another 0.5% in February, or £1,478 in cash terms.
“This was an eighth successive month of house price growth, as the resilience which has typified the market throughout the pandemic shows little sign of easing. Year-on-year prices grew by 10.8 per cent, the fastest pace of annual growth since June 2007, pushing the average house price up to another record high of £278,123.
UK’s housing market continues to defy the economic headwinds while market correction looms.
“Two years on from the start of the pandemic, average property values have now risen by £38,709 since February 2020. Over the last 12 months alone house prices have gained on average £27,215 Galley said. “This is the biggest one-year cash rise recorded in over 39 years of index history, Galley added.
The South West of England also continues to record significant gains. Annual house price inflation is now up to 13.4%, with by far the strongest quarterly performance (3.5%) of any region (average house price of £293,968).
In the meantime, Northern Ireland also continues to record impressive price growth, with prices up by 13.1% compared to this time last year, giving an average property value in February of £173,911.
“Looking ahead, as Covid moves into an endemic phase and almost all domestic restrictions are removed, geopolitical events expose the UK to new sources of uncertainty, Galley warned. “The war in Ukraine is a human tragedy, but is also likely to have effects on confidence, trade and global supply chains.
“Surging oil and gas prices are one immediate consequence, meaning that inflation in the UK – already at a 30-year peak – will remain higher for longer. This will add to the squeeze, Galley said “on already stretched household incomes. While increases in Bank Rate look likely in the near term, the extent of the rises will depend on how it affects prices and companies’ approaches to pay over the months to come.
“These factors are likely to weigh on buyer demand as the year progresses, with market activity likely to return to more normal levels and an easing of house price growth to be expected.”
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