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House prices rise at fastest pace since 2007

Written by: Lana Clements
House price growth has hit its highest level in 15 years, with average property values almost £40,000 higher than before the pandemic.

Values jumped by 10.8% annually in February to reach an average high of £278,123, according to Halifax.

On a monthly basis, prices increased by 0.5% from January. This marked an eight successive month of growth, according to the lender’s house price index.

Average property values have now risen by £38,709 from February 2020, just before the pandemic began.

Russell Galley, managing director at Halifax, said: “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.

“This may be a particular issue at the larger end of the property market.”

Over the past year the average price of detached properties have risen by £43,251 – more than four times the monetary increase of £10,462 seen in flats.

The impact of war

Experts warned the war in Ukraine could provide uncertainty for the UK economy and put the brakes on rising house prices.

Galley said: “The war in Ukraine is a human tragedy, but is also likely to have effects on confidence, trade and global supply chains…

“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.”

Karen Noye, mortgage expert at wealth manager Quilter, added: “We are living through extraordinary times and despite jumping from crisis-to-crisis house prices not only remain robust, they completely shatter expectations.

“However, a convergence of factors may put the brakes on runaway house prices.

“The invasion in Ukraine continues to shock the world and its impact will ripple throughout the UK’s economy…

“Ultimately, 2022 could see house prices slow significantly if not drop as the economy deals with the prospect of war in Europe.

“However, the UK suffers a significant housing problem as there simply is not enough stock. Until the shortfall is met house prices are likely to stay relatively high.”

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