House prices climbed higher in April, new figures from a major mortgage lender reveal.
Annual house price growth edged up to 5.2 per cent in April from March’s 5.1 per cent. The average UK house price is now a £193,048 – the highest on record.
Housing analysts blame a lack of supply for rising prices and declining affordability.
“Although house price rises in recent months may seem subdued when compared to last year, prices are still rising well above the level of inflation,” said Jeremy Duncombe, a director at the Legal and General Mortgage Club.
“This is due to a surplus in demand which is outpacing the supply of new houses. This imbalance in the housing market has pushed up the average asking price in April, making homeownership a more distant dream for many potential buyers.”
Andrew Mahon, director of the Equfund group, a social investment fund, said: “We have a housing crisis in the UK and, for over 40 years, consecutive governments have done little to address it.”
“We have long known that the UK needs an estimated 250,000 new homes built every year to meet demand yet, according to the government’s own figures we built just 140,000 new homes between 2013-2014,” he added.
Meanwhile, demand for housing is expected to strengthen.
“Healthy labour market conditions and continued low mortgage rates should help underpin housing demand in the months ahead,” said Nationwide chief economist Robert Gardner.
Record low base rates and intense competition between mortgage providers have combined to push mortgage costs down to record low levels. Meanwhile, the UK employment rate is at its highest level on record, according to the Office for National Statistics. However, Gardner notes that the market is still not at full throttle.
“The strength of the economy and relatively subdued pace of activity in the housing market remains something of an anomaly. It is possible that heightened uncertainty ahead of the election is weighing on activity, though there is no compelling evidence from previous UK elections to suggest a strong impact.”