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UK Housing Market Reaches 17-Year High
UK Housing Market Reaches 17-Year High
31/03/2022
UK house prices have increased due to inflation, robust demand and limited stock of homes on the market.
Prices boom across all of the United Kingdom, with average prices up by £33,000 in 12 months to March.
Housing market prices grew in March at the fastest rate since 2004, continuing the ascent to new record levels – with the price of an average home now a fifth higher than at the start of the coronavirus pandemic.
The cost of a typical UK home reached a new record high of £265,312, rising £33,000 in the past year.
Prices rose by 14.3% in the year to March, the strongest pace of increase since November 2004, when the UK experienced a housing boom that preceded the financial crisis, according to Nationwide, the UK’s largest building society.
Households in the UK are being squeezed by a cost of living crisis, with prices rising at their fastest rate for 30 years as fuel, energy and food costs surge.
Detached homes have gone up nearly £68,000 in price since the start of the pandemic, a 22% rise, as people working from home sought out bigger properties, while average flat prices have increased by £24,000, or 14%.
Mortgage costs are also rising after the Bank of England raised interest rates three times in four months to try to help lower that price inflation. But these factors have not dampened acceleration in house price growth.
A combination of robust demand and limited stock of homes on the market has kept upward pressure on prices.
Robert Gardner, Nationwide's chief economist.
Economists are now trying to ascertain whether rising inflation (including unprecedented increases in energy bills from Friday, when the price cap increases) and rising interest rates to combat it will finally dent house prices.
Many people took stock of how they lived and worked during Covid lockdowns, leading to a race for space among buyers that was fuelled by a stamp duty holiday.
In recent months, there has been a shortage of homes on the market to match demand, which has pushed up asking prices.
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.
Real estate brokers are concerned that the rising cost of living, coupled with incrementally rising house prices, would push consumers to the brink.
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