Annual house price growth climbed to 10.8% in February, its strongest level since June 2007, according to the latest Halifax House Price Index.

Halifax suggested that the UK housing market had “shrugged off” a slightly slower start to the year, with average property prices rising by another 0.5% in February, and by £1,478 in cash terms.

February was the eighth successive month of house price growth, to take the average UK house price to another new record high of £278,123.

Two years on from the start of the pandemic, Halifax’s figures indicate that average property values have now risen by £38,709 since February 2020, jumping by 16%. Over the last 12 months alone, the data also showed that house prices have gained on average £27,215, which is the largest one-year cash rise recorded in over 39 years of Halifax’s index history.

“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,” said Halifax managing director, Russell Galley.

“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 rate 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.

“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.”

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