UK house prices increase at fastest pace since 2007

Annual growth of 10.8 per cent pushes average price of property to £278,123

Annual UK house prices in February grew at their fastest pace in about 15 years, data released on Monday from the Halifax House Price Index revealed.

The annual growth rate now stands at 10.8 per cent, compared with the 11.9 per cent it reached in June 2007. In cash terms, the rise equates to £27,215 ($35,998).

The biannual rise is even steeper. Since the onset of the coronavirus pandemic, house price growth stands at 16 per cent, or £38,709 in cash terms.

Monthly house price growth also quickened in February, rising to 0.5 per cent (£1,478 in cash terms) after a slower start to the year.

The two accelerating indexes combined to push average UK house prices to a record high of £278,123, even higher than £260,000 estimate proffered by Nationwide's indexing equivalent last week.

Despite the upwards trajectory, the squeeze on household finances triggered by rising energy costs, inflation and potential interest rate increases is still expected to weigh on the UK property market later in the year.

And while the uncertainty triggered by Covid-19 may be receding, the uncertainty bred by the Russia-Ukraine war looks set to play a suppressing role.

“These factors are likely to weigh on buyer demand as the year progresses, with market activity likely to return to more normal levels and an easing of house price growth to be expected,” said Halifax managing director Russell Galley.

Strongest house price growth in Wales

Breaking the index down, seven UK areas are now reporting double-digit annual house price inflation, highlighting not only the strength but the breadth of gains across the country.

Wales was, once again, the strongest-performing nation or region, with annual house price growth of 13.8 per cent, pushing the average price to £207,184.

Elsewhere, Northern Ireland also continues to record strong price growth, with prices up 13.1 per cent to £173,911 on this time last year.

Despite robust growth of 9.2 per cent in Scotland, it grew at the slowest rate of any area outside of London where prices grew by 5.4 per cent in February.

Although a regional laggard, this was still the strongest level of growth in the capital since the end of 2020.

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