According to a quarterly study released by the Nationwide Building Society which analysed the latest government HPI report the annual rate of house price growth has increased from 12.6% in February of 2022 to 14.3% in March. That equates to the largest rate of increase since 2004.
The price of an average detached house in the UK rose by nearly £68,000 between Quarter 1 2020 and Quarter 1 2022 while the price of an average flat went up by a figure of £24,000. The data highlighted a trend away during the pandemic from flats and apartments in cities and towns to bigger detached properties in cheaper areas of the country where buyers could find more space and land that they had craved during lockdown.
The Nationwide report highlighted reasons such as greater employment and higher wages with buyers accruing savings during the COVID 19 outbreak that have lead to greater purchasing power towards the end of the pandemic.
Remarking on the data Nationwide’s Chief Economist, Robert Gardner, made a cautionary note saying “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.”
Other takeaways from the report include revealing a regional high from Wales showing the strongest annual price change and a regional low from London with the weakest increase over the past year. Gardner also commented that “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.”