UK house prices hit record high
The Halifax House Price Index, based on the bank’s mortgage data, found that monthly house price growth fell to +0.3% in January, the lowest rise since June 2021.
The annual rate of growth remained steady at 9.7%, while transaction volumes returned towards pre-Covid levels.
In keeping with last year, Wales kicked off 2022 as by far the strongest performing nation or region in the UK. With annual house price inflation of 13.9%, down marginally from December, the average house price fell slightly to £205,253.
Northern Ireland also continues to record strong price growth, with prices up 10.2% on last year, giving an average property value in January of £170,982.
House price growth remains strong in Scotland too, though the annual rate of inflation slowed somewhat to 8.9%, with the average property price edging down to £192,698.
In England, the North West was once again the strongest performing region (up 12% year-on-year, average house price of £213,200) and now has the second highest rate of annual growth in the UK.
While London remained the weakest performing area of the UK, the capital continued its recent upward trend with annual house price inflation accelerating for a third straight month to now stand at 4.5%. This was double the rate recorded in December and its strongest performance in over a year.
Russell Galley, managing director at Halifax, said: “House price growth slowed somewhat at the start of the year, rising by just 0.3% in January, the smallest monthly increase since June 2021. This followed four consecutive months of gains above 1%, and with annual growth remaining at 9.7%, the average UK house price was little changed, edging up slightly to a new record high of £276,759.”
Galley added that affordability remains at “historically low levels as house price rises continue to outstrip earnings growth” and that “younger generations still face significant barriers to home ownership as deposit requirements remain challenging”.
Jason Tebb, chief executive of OnTheMarket.com, said: “While some of the heat of last year has tailed off, there are still good numbers of buyers keen to move. January saw a rise in terms of new applicants, viewings and valuation requests, as motivated buyers and sellers who didn’t make the move last year remain keen to do so.
“It’s uncertain whether last week’s interest rate rise, coming so soon after the first rate increase in more than three years, will impact buyer confidence, particularly given greater pressure on budgets from an increase in the cost of living. But with mortgage rates still comparatively cheap and many on fixed-rate products, positive sentiment should prevail for now although it’s possible that the growth in average prices may continue to slow over the next few months. However, that may not be such a bad thing as the true health of the housing market is better measured in transaction volumes than in house price growth.”
The house price news came after a weekend where TV presenter Kirstie Allsop was slammed on social media for her comments about first-time buyers.
In an interview with the Times, Allsop suggested young people struggling to buy a home “just buy somewhere cheaper”.
The Location, Location, Location presenter said she felt “enraged” when people claimed they could not afford a home and told graduates and school-leavers to consider moving back in with their parents, while cancelling their gym and Netflix subscriptions.
One Tweeter pointed out that saving £40 on subscriptions would still mean saving up for 54 years to put down a deposit on the average house.
Allsop, 50, bought her first home at the age of 21 with help from her family. Her father is Charles Allsopp, 6th Baron Hindlip, a former chairman of Christie’s.