House price growth hits highest level since 2004 with record average of £265.3k
Annual house price growth has increased to 14.3 per cent, from 12.6 per cent in February.
According to Nationwide’s house price index, this was the strongest pace since November 2004.
The price tag of the average home hit a new record of £265,312, an increase of more than £33,000 in the past year.
Prices have also surged some 21 per cent since pre-pandemic levels in early 2020.
Nationwide’s chief economist Robert Gardner said: “The housing market has retained a surprising amount of momentum given the mounting pressure on household budgets and the steady rise in borrowing costs. “
The number of mortgages given the green light for house purchase remained high in February at around 71,000, nearly 10 per cent above pre-pandemic levels.
“A combination of robust demand and limited stock of homes on the market has kept upward pressure on prices,” Gardner added.
The housing market was likely to slow in the coming months, Nationwide forecast.
“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,” Gardner added.
“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.”
“Space, space and more space” had been the key driving force of demand over the past year to year and a half, Tomer Aboody, director of property lender MT Finance, said.
“Buyers have been adapting to the trend of working from home at least some of the time, and need designated space to do so.
‘With the lack of supply of good-sized homes, prices have surged. There are many more buyers than properties for sale, and those buyers are armed with savings due to the lack of spending during the pandemic. On top of this, lower interest rates mean they can afford bigger mortgages.”