British homeowners have made more from the soaring value of their bricks and mortar than they earned from their jobs over the past year, new figures reveal today.
The average price of a home rose 0.5 per in February to a record £278,123, according to data from mortgage lender Halifax. That represents an annual rate of growth of 10.8 percent, the fastest since June 2007.
Over the last 12 months, the value of a home has gained £27,215 on average, the biggest one-year cash rise recorded in nearly 40 years of Halifax’s house price index. This outstrips the £25,971 median pay for all employees in 2021, according to figures from the Office for National Statistics, in a trend that will widen the gap between property ownership haves and have-nots.
Halifax managing director Russell Galley said: “This was an eighth successive month of house price growth, as the resilience which has typified the market throughout the pandemic shows little sign of easing.
Lack of supply continues to underpin rising house prices, with recent industry surveys showing a dearth of new properties being listed, now a long-term trend.
This may be a particular issue at the larger end of the property market. Over the past year, the average price of detached properties has risen at a rate more than four times that of flats in cash terms.
Looking ahead, as Covid moves into an endemic phase and almost all domestic restrictions are removed, geopolitical events expose the UK to new sources of uncertainty. The war in Ukraine is a human tragedy but is also likely to have effects on confidence, trade, and global supply chains.
Surging oil and gas prices are one immediate consequence, meaning that inflation in the UK – already at a 30-year peak – will remain higher for longer. This will add to the squeeze on already stretched household incomes. While increases in bank rates look likely in the near term, the extent of the rises will depend on how it affects prices and companies’ approaches to pay over the months to come.
London remains the weakest region in Britain with house prices rising at 5.4 percent, although this is its strongest level since the end of 2020.
Guy Gittins, chief executive of agents Chestertons, said: “London is seeing a substantial uplift in buyer demand – well beyond the previous record numbers of last year. Although the suburbs remain a popular choice, the volume of buyer enquiries for areas such as Richmond or Kew has remained at last year’s levels.
If 2021 was defined by a race for space and people moving out to the suburbs, 2022 is seeing an absolute boomerang effect with house hunters rushing back into the capital; a change in buyer behaviour that has been accelerated by the return of office workers and international travellers.”