UK house prices climb 8.6% in February

The average UK house price increased by 8.6% over the year to February, a figure up from 8.0% in January, according to the latest UK House Price Index published by the Office for National Statistics (ONS).

This is the highest annual growth rate the UK has seen since October 2014.

The ONS reported that February saw the average house price across the UK climb to £250,000, a figure £20,000 higher than the same month last year.

Regionally, the ONS also revealed that average house prices have increased over the year by 8.7% in England to £268,000, 8.4% in Wales to £180,000, 8.0% in Scotland to £162,000 and 5.3% in Northern Ireland to £148,000.

The North West was the English region to see the highest annual growth in average house prices (11.9%), while London saw the lowest (4.6%). London’s average house prices remain the most expensive of any region in the UK at an average of £496,000.

Responding to the latest figures, Market Financial Solutions CEO, Paresh Raja, said that the performance of the property market during the pandemic has been “remarkable”.

“The stamp duty holiday has been in play since July last year, but the sheer level of demand we have seen from homebuyers in spite of wider economic uncertainty is extremely impressive, and today’s ONS index underlines how this is driving up prices at a rate we have not seen in almost a decade” Raja commented.

Trussle head of mortgages, Miles Robinson, said it is “worth bearing in mind” to note that house prices could fall when the stamp duty holiday ends.

“At the moment, the increased demand is creating a false economy of bidding wars and a lower stock of available properties,” he said. “In addition to this, there’s been a reported increase in homes that have sold for inflated prices being down valued at the survey stage within the mortgage process.”

However, Coreco managing director, Andrew Montlake, suggested that he expects the market to maintain the level of transactions.

“Even when the stamp duty holiday finally comes to an end, we expect the mortgage guarantee scheme to continue to support demand among first-time buyers, which will ripple up through the market and maintain a certain level of transactions,” Montlake commented.

“Structural forces will also support transaction levels in the short to medium-term, as the pandemic has triggered a deep rethink among homeowners about what they want from a property. The rules of the game have changed fundamentally and more people are finding themselves in properties that no longer suit their work lives.”

Legal & General Mortgage Club director, Kevin Roberts, added: “It is important that the whole industry works together and with policymakers, to ensure this growth is sustainable.

“By this, we mean supply must be boosted to keep pace with demand, ensuring the prospect of homeownership is an affordable reality for all; and also that these new homes are designed and built in ways that supports our country’s net zero emissions targets. Creating sustainable homes, at scale, is the key to a successful future for the UK housing market.”

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