According to the ONS’ latest house price index (HPI), average house prices shot up over the year in England by 10.7 per cent to £296,000, in Wales to £205,000, rising 14.2 per cent, and in Scotland to £181,000, up 11.7 per cent. In Northern Ireland things were a little less drastic, but the average house will now set customers back £159,000 after a 7.9 per cent annual rise.
Regionally, London continues to see the lowest annual growth at 8.1 per cent, but is still the most expensive average property by a long shot at £529,882 – a bit of a gap considering the South East, the second highest average, is £380,528 for an average pad.
For perspective, the average London house price ten years ago in February 2012 was £292,381, and the South East sat at £218,487 average.
The country’s most affordable region remains the North East, where an average home will set customers back £152,551, in spite of being up 9.4 per cent year-on-year.
The greatest HPI growth has been in the South West and the East of England, each having risen 12.5 per cent annually to £312,697 and £345,652 respectively.
HPI should calm down after spring bounce
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “The report shows prices continuing on their apparently inexorable upward path but that’s not quite what’s happening on the ground now.
“Demand is still well ahead of supply but concerns about the rising cost of living, squeezed pay packets and potentially further interest rate rises, are reducing price growth and transaction numbers.
“We expect activity to return to more ‘normal’ pre-pandemic conditions as supply picks up as part of the usual spring bounce.”
Lingering high demand
Gareth Lewis, commercial director of property lender MT Finance, said: “Those trying to move up the ladder are finding it harder still as the trading gap grows wider and the home they are moving to becomes relatively more expensive. First-time buyers are finding it even more difficult, with even more money required for a deposit.
“Some reform to stamp duty, perhaps removing the need for downsizers to pay it, needs to be considered to stimulate the market and increase supply, which will help keep prices in check.”
Sundeep Patel, director of sales at specialist lender, Together said: “First time buyers hoping to find a deal before the summer months are likely to struggle to climb the property ladder and could find themselves priced out altogether.
“Ongoing economic uncertainty will directly impact people’s ability to spend on property – but at this stage we just don’t know by how much. Over the next few months, we might expect activity to cool as most homeowners opt to stay put and use any available money to meet surging household bills this summer. However, as recent rises have shown, it’s still an unpredictable market.”
Chris Hutchinson, chief executive of rental platform Canopy commented: “Many potential homebuyers will be putting their homeownership dreams on the back burner amidst fears of not being able to raise the necessary funds or keep up with repayments.
“Many choose to rent, but those looking at homeownership may currently feel trapped in a constant cycle of renting as they struggle to get themselves onto the property ladder. This extra time can be used to ensure a potential homebuyer is in the best possible position for when the time comes. Ensuring rental payments count towards their credit score and taking steps to improve financial wellness will give them an extra edge over the competition when the time comes.“
Market could see future downturn due to a lack of choice, not funds
Alex Lyle, director, Antony Roberts Estate Agency, said: “London continues its upwards trend in prices, with detached family homes doing particularly well. We continue to see large numbers of viewings, multiple offers and sealed bid scenarios, with buyers on our patch anxious not so much about rising house prices or interest rates but limited choice.
“The housing market has been stubbornly short on supply but more stock is becoming available, particularly in the mid- to upper-family house market, as those properties look their best at this time of year. Sellers are also bringing forward plans in the hope of benefiting from what could turn out to be a real window of opportunity.”
Mark Harris, managing director, SPF Private Clients, said: “The ready availability of cheap finance is one of the contributing factors to higher house prices.
“Lenders remain keen to lend, with borrowers opting for longer-term fixes in order to counter the considerable uncertainty in the world.
“While changes are being consulted on to relax some affordability criteria and allow certain buyers to borrow more, a return to irresponsible lending is unlikely given there would still be barriers in place.”