The average UK house price was £278,000 in March 2022, up £24,000 from March 2021.
Seasonally adjusted, this is a 0.6 per cent increase between February and March 2022, following an increase of 0.9 per cent in the previous month.
The seasonally adjusted estimate of residential transactions was 114,650, according to HMRC. This is 35.7 per cent lower than March 2021 and 2.6 per cent higher than February 2022.
Regional breakdown
Wales saw the greatest growth at 11.7 per cent to £206,000. England skimmed the national average at 9.9 per cent, £298,000; Scotland went up eight per cent to £181,000, and Northern Ireland saw a 10.4 per cent growth to £165,000.
London continues to be the region with the lowest annual growth at 4.8 per cent YoY, yet remains the most expensive at an average house price of £524,000. The East Midlands saw the highest YoY change at 12.4 per cent. The North East continues to have the most affordable average housing at £155,000.
Market analysis
While far from catastrophic, the figures indicate a market decline despite a continued imbalance in supply and demand.
Simon McCulloch, chief commercial and growth officer at Smoove said: “There’s a clear dichotomy between rising prices, greater supply, and constrained affordability and we’ll see within the coming months if economic pressures test the market’s current trajectory.”
Emma Cox, manging director of real estate at Shawbrook, cites the impact of inflation and the cost-of-living crisis on consumer confidence as a causal factor for the slowdown.
She said: “It’s likely that many will pause their property plans. However, for now the property market remains in good stead. Demand continues to be high, outweighing supply, and leading to competitive bidding wars that are pushing prices up further.
“More quality supply is clearly needed, but with the cost of material and labour on the rise, new properties are likely to continue to edge prices further up.”
EPC proposals and energy costs will also impact first time buyers, tenants, and landlords.
Cox added: “Tenants have started to look for properties with bills included to mitigate any future rises.”
The housing costs aren’t going to be getting any cheaper according to Anna Clare Harper, director of real estate technology platform IMMO, who cites The Construction Leadership Council’s report that material prices are up 20 per cent this year.
“The shortage of suitable, affordable housing is being made worse by planning backlogs from lockdown alongside labour and material shortages and inflationary pressures, as well as the fact that many new-build schemes are unaffordable to local people,” she said.
However, lenders’ are still “keen to lend” according to Mark Harris, chief executive of mortgage broker SPF Private Clients, with “a number are making tweaks to criteria” to offset affordability issues.
He said: “Mortgage rates remain competitive although they are on the rise. Borrowers need to move quickly to secure the best rates as they are often pulled at short notice.
“For example, Nationwide raising its loan-to-income cap on like-for-like remortgages, while still ensuring they are lending in a responsible way.”
Abnormal ONS stats
The ONS stated that there may be increased volatility and larger revisions to the HPI than usual due to the impact of the pandemic, and HMLRs increased use of automation in application processing.
The report explains, “As a result of this process, initial data numbers may be lower than pre-coronavirus pandemic transaction volumes; however, in the medium to long term, this will lead to higher volumes being processed.”
March 2022’s data is also abnormal as the stamp duty tax breaks were originally due to conclude at the end of March 2021, so “it is likely that March’s average house prices were slightly inflated as buyers rushed to ensure their house purchases were scheduled to complete ahead of this deadline.”
