House prices have risen at the fastest rate in 14 years, propelled by an extreme shortage of homes for sale, as buyers scramble to secure the few homes on the market.
Property values jumped 10.8pc in the year to the end of February, the steepest growth since before the financial crisis in 2007, according to Halifax, the lender.
In cash terms, the average home has gained an additional £1,500 last month, reaching a record high of £278,123.
Russell Galley, of Halifax, said he expected growth to wane over the coming year, as households tighten their belts in the face of rising inflation. The consequences of the war in Ukraine will add to the squeeze on already stretched household incomes, he said.
“Surging oil and gas prices are one immediate consequence, meaning that inflation – already at a 30-year peak – will remain higher for longer. These factors are likely to weigh on buyer demand as the year progresses, with market activity to return to more normal levels and an easing of house price growth to be expected,” he added.
Seven British regions have had double-digit annual growth, with Wales continuing to outpace all other regions. Welsh property prices rose 13.8pc, up to an average £207,184.
In England, the South West recorded large gains, with price inflation reaching 13.4pc, amid a sustained interest in more rural, scenic living. London property recorded the poorest growth, rising only half as much as the rest of the country.
Karen Noye, a mortgage expert at wealth manager Quilter, said house prices have “shattered expectations” as we jump from one crisis to another but that may end soon.
She said: “A convergence of factors may put the brakes on runaway house prices. Ultimately, 2022 could see prices slow significantly if not drop as the economy deals with the war in Europe. However, there simply is not enough stock. Until the shortfall is met house prices are likely to stay relatively high.”
First-time buyers and prospective movers will have less cash to splash as inflation jumps up a gear and April tax rises come into play. This means there have been few worse times as now to get onto the housing ladder, she said.
