The average price of a home has jumped 11 per cent over the past year to a new record figure, according to the Halifax House Price Index.
The average price of a house is now £282,753, a steep increase of £43,577 in just two years after the UK’s first Covid-19 lockdown.
Prices have increased 1.4 per cent since last month – the largest monthly increase in the past six months.
“Average UK house prices rose again in March for the ninth month in a row,” Halifax managing director Russell Galley said. “The increase of 1.4%, or £3,860 in cash terms, was the biggest jump since last September. With 2021’s strong momentum continuing into the beginning of this year, the annual rate of house price inflation continues to track around its highest level since mid-2007.”
The new record is up around £28,113 in just 12-months – and not far off the average annual earnings for Brits of £28,860, Galley explained.
A trickling supply of housing stock has led to a frenzy among buyers, and has made it increasingly difficult for first-timers to get on the property ladder.
It comes at a time when households are already wrestling with the climbing cost of living, and the Bank of England battles against spiralling inflation across the board. However, Galley seems to think the average price of a home is close to peaking.
“There is no doubt that households face a significant squeeze on real earnings, and the difficulty for policymakers in needing to support the economy yet contain inflation is now even more acute because of the impact of the war in Ukraine,” he continued.
“Buyers are therefore dealing with the prospect of higher interest rates and a higher cost of living. With affordability metrics already extremely stretched, these factors should lead to a slowdown in house price inflation over the next year.”