UK house prices grow at fastest rate for 17 years
UK house prices grew at the fastest annual pace since 2004 in March, continuing the ascent to new record levels – a fifth higher than at the start of the coronavirus pandemic.
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.
The price of an average UK home hit £265,312, more than £33,000 higher than March 2021. Price rises were evident across the country, with prices in Wales soaring by 15% over the year. House price growth accelerated in every region of England and Scotland.
Detached homes have gone up nearly £68,000 in price since the start of pandemic, a 22% rise, as people working from home sought out bigger properties, while average flat prices have increased by £24,000, or 14%.
The near-relentless rise in house prices has come despite the economic damage from the coronavirus pandemic, which caused a deep slump in activity. However, government wage support schemes and savings during lockdowns have supported the housing market. Nationwide estimated that reduced spending has meant that households were on average able to save £190bn more than would have been expected before the pandemic – £6,500 per household, albeit unevenly spread.
The government also intervened with stamp duty cuts which subsidised the housing industry and helped to keep prices rising as soon as the market unfroze.
Economists are now trying to ascertain whether rising inflation (including unprecedented increases in energy bills from Friday when the UK’s price cap increases) and rising interest rates to combat it will finally dent a market that has seemed nearly unaffected by
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