House prices up 11% in a year to add £ 27k to a home, ONS says

The typical price of a property increased £ 27,000 in the year to February, new figures from the Office for National Statistics show.

Prices jumped 10.9 per cent, up from a 10.2 per cent rise seen in the year to January.

As a result, the average price of a home was £ 277,000 in February, compared to £ 250,000 the same point a year ago.

It has lead one expert to ask: ‘Has the property market ever been so disconnected from economic reality?’

Going up: The average property price in the UK has reached £ 277,000, the ONS said

The latest data represents one of the biggest annual increases in average property prices for more than 15 years.

Annual house price inflation hit a record 13.5 per cent in June 2021 and 11.5 per cent in September, due to expiring deadlines for a temporary reduction in stamp duty.

February’s jump was beyond the expectations of experts, with analysts forecasting a 10.1 per cent rise.

Ceri Lewis, house prices statistician at the ONS, said: ‘House prices rose again this month, with prices in the UK and England now at record levels.

‘The fast rise in UK rental prices also continued, with their highest annual growth in nearly six years.

‘All nations and regions saw increases, with London experiencing its strongest rise in a year.’

One direction: Property prices increased by 10.9% in the year to February, the ONS said

One direction: Property prices increased by 10.9% in the year to February, the ONS said

Variations: A chart showing property price shifts in different areas of the nation

Variations: A chart showing property price shifts in different areas of the nation

The ONS said house prices in England grew by 10.7 per cent to an average of £ 296,000 in February.

Wales reported a rise of 14.2 per cent to £ 205,000, while prices increased by 11.7 per cent to £ 181,000 in Scotland, and by 7.9 per cent to £ 159,000 in Northern Ireland.

Prices across London saw the lowest annual growth in England but picked up slightly to rise by 8.1 per cent as the return of City workers bolstered the capital’s recovery.

Andrew Montlake, managing director of Coreco, said: ‘Has the property market ever been so disconnected from economic reality?

‘For prices to rise further in February should create more unease than it does celebration. Yes, the jobs market is strong but the latest inflation data coupled with stalling economic growth in February suggest the bull run will soon come to an end.

‘Even then, though, average property values ​​are unlikely to fall by much as mortgage rates are still very competitive and supply levels are ridiculously low.

‘As it always does, the supply and demand imbalance will support average property values ​​moving forward, even as we enter a potentially significant economic storm.’

North London estate agent and former Rics chairman, Jeremy Leaf, said: ‘These numbers show house prices continuing on their apparently inexorable upward path but that’s not quite what’s happening on the ground now.

‘Demand is still well ahead of supply but concerns about the rising cost of living, squeezed pay packets and potentially further interest rate rises are reducing price growth and transaction numbers.

‘Looking forward, we expect activity to return to more’ normal ‘pre-pandemic conditions as supply picks up as part of the usual spring bounce.’

One expert thinks it is ‘astonishing’ that property prices have kept rising amid soaring inflation and a cost of living crisis affecting millions of households.

Iain McKenzie, chief executive of The Guild of Property Professionals, said: ‘During a time when household bills are increasing for millions of people, coupled with soaring rates of inflation, it’s astonishing that house prices continue to climb.

‘There was an expectation that following a slower pace of growth in January, the figures for February would continue to show a cooling down of the market, but there does not seem to be a sign of that anytime soon.

‘An annual price change of 10.9% means that the end of incentives such as the stamp duty holiday, in place this time last year, have done little to deter people from wanting to purchase their own home.

‘House prices continue to be driven by the lack of available properties on the market and the speed at which many of them are sold. With the demand for housing still there, prices will defy the expectations of any readjustment. ‘

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