Average house prices rose 10.8% year on year in April to a record high £286,079according to the latest Halifax house price index.
The rise is down from the 11.1% posted in March, but it is still the tenth consecutive monthly rise in prices, the longest since 2016.
The report said: “The real estate market has continued to defy expectations of late, with the rate of growth in house prices accelerating since the end of the stamp duty holiday last year.”
Average house prices have risen by £47,568 over the past two years. It took the previous five-and-a-half years to make a similar jump of £47,689 between October 2014 and April 2020, the survey points out.
House prices have fallen in just four months since the start of the pandemic in March 2020. The index adds that the average monthly gain of 0.9% over the past year is more than double the monthly increase typical observed during the previous decade.
However, the report says it expects house prices to slow later this year as rising inflation and interest rates weigh on household budgets.
Yesterday youthe Bank of EEngland survey the base rate by 25 basis points to 1%, the highest level since 2009.
On a regional basis, Northern Ireland has overtaken the South West of England as the best performing country in the UK in terms of annual house price inflation, now at 14.9%, its highest annual growth rate since December 2007.
Halifax chief executive Russell Galley said: “Housing transactions and mortgage approvals remain above pre-pandemic levels and continued growth in new buyer inquiries suggests activity will remain heightened. short term.
“The imbalance between supply and demand persists, with an insufficient number of new properties coming onto the market to meet the needs of potential buyers and strong competition to secure properties driving up prices.
“There remains evidence that this demand is centered on larger family homes, rather than smaller properties such as apartments. Over the past year, prices for detached and semi-detached properties have increased by more than 12%, compared to only 7.1% for apartments. The net cash increase for detached properties, at just under £50,000 over the past year, is nearly five times that of apartments.
“For now, at least, despite the current economic uncertainty, the sharp increases we’ve seen in house prices show little sign of slowing. Demand in the housing market remains firm and mortgage servicing costs are relatively stable, with fixed rate transactions accounting for around 80% of home mortgages across the sector, shielding many households from the effects of rate hikes so far.
“However, the headwinds facing the broader economy cannot be ignored. The house price-to-income ratio is already at an all-time high, and with rising interest rates and inflation further squeezing household budgets, it remains likely that the rate of house price growth real estate will slow by the end of this year.
Lucy Pendleton, a real estate expert at independent real estate agents james Pendleton, says: “It’s a housing market with its fingers in its ears, ignoring the winds blowing around it and carrying on blithely.
“With all the economic speed bumps, the threat of double-digit inflation and soaring unemployment, it’s amazing how little has been affected. However, a tenth consecutive monthly increase has been recorded and the annual growth is still in double digits.
“Appropriately for a market separated from reality, individual properties are seeing the strongest growth, suggesting that upsizers still have to fight the hardest against dwindling inventory.
“The continued lack of supply and the savings left in some people’s pandemic piggy banks seems enough to fuel new buyer demands and keep the show on the road for now. Yet the latest rise in interest rates to 1% will only make it harder to get a mortgage in the months ahead. »
Shaw Financial Services Founder Lewis Shaw adds: “April may have been another barnstorm month, but the wheels could come off the real estate market dramatically in the second half of the year. Will house prices go down? Probably not, mainly due to the lack supply.
“Are mortgage lenders starting to show signs of tightening their belts and taking a more cautious approach? Yes. This will temper trading levels in the coming months. Much will depend on the strength of the labor market and its ability to withstand the myriad headwinds it faces. But there is a very real risk of a recession ahead. »