This steep rise saw average house prices reach a new record high of £282,753. Two years on from the first lockdown, house prices have now risen by £43,577.
The South West of England has overtaken Wales as the UK’s strongest performer in terms of annual price house inflation, now up to 14.6%, its highest rate of annual increase since September 2004. The average house price is now £298,162, a record for the region.
While this is the first time since January 2021 that Wales has not recorded the UK’s highest annual growth, house price inflation remains extremely strong, at 14.1%. The average house price is £211,942 which is yet another all-time high for the country.
Property prices in Northern Ireland also continue to be on the rise, with annual growth now at 13%, and an average price of
£177,265.
Though house prices also edged up once more in Scotland – reaching a new record of £194,621 – the rate of annual growth continues to slow somewhat, falling to 8.2% from 9.3% last month.
Elsewhere, the South East also recorded a big increase, with house price growth at 11.6% and an average price of
£385,790. Prices in the region have now risen by £40,177 over the last year, the first time any English region outside of London has ever posted a £40,000-plus rise over just 12 months.
London itself continued its recent upward trend, with prices now up by 5.9% year-on-year, with an average price of
£534,977.
Russell Galley, Managing Director, Halifax, said: “Average UK house prices rose again in March for the ninth month in a row. The increase of 1.4%, or £3,860 in cash terms, was the biggest jump since last September. With 2021’s strong momentum continuing into the beginning of this year, the annual rate of house price inflation (+11.0%) continues to track around its highest level since mid-2007. The new record price of £282,753 is up some £28,113 on a year ago, not far off average UK earnings over the same period (£28,860).
“The story behind such strong house price inflation remains unchanged: limited supply and strong demand, despite the prospect of increasing pressure on households’ finances. Although there is some recent evidence of more homes coming onto the market, the fundamental issue remains that too many buyers are chasing too few properties. The effect on house prices makes it increasingly difficult for first-time buyers looking to make their first step onto the ladder but also challenges home movers who face ever bigger leaps to move up the rungs to a larger property.
“However, in the long-term, we know the performance of the housing market remains inextricably linked to the health of the wider economy. There is no doubt that households face a significant squeeze on real earnings, and the difficulty for policymakers in needing to support the economy yet contain inflation is now even more acute because of the impact of the war in Ukraine.
“Buyers are therefore dealing with the prospect of higher interest rates and a higher cost of living. With affordability metrics already extremely stretched, these factors should lead to a slowdown in house price inflation over the next year.”
Simon English, of Simon English Property Search, says: “Whilst the surge of city dwellers wishing to have a lifestyle change has slowed down, the demand for homes in the Home Counties still outstrips supply. As a result, for every home that comes to the market, there is interest from multiple buyers and prices being achieved continue to exceed the asking prices.”
Guy Gittins, CEO of Chestertons, says: “Historically, spring marks the beginning of increased market activity with a surge in properties coming to the market. We expect this to be the case again this year, particularly since strong demand from buyers is driving the capital’s average property price ever higher, making a transaction potentially more appealing for sellers.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: "Halifax reports yet another uplift in property prices as demand continues to outstrip supply. Lenders are still keen to lend and have plenty of cash available to do so, enabling borrowers who may be sitting on considerable savings accrued during lockdown to stretch themselves to afford a bigger property.
"There has been wide speculation that higher fixed costs such as the hike in national insurance contributions and increase in the general cost of living will impact affordability calculations when it comes to getting a mortgage. If costs are going up, it stands to reason that this will impact borrowers as there is less money available to service the mortgage. But for now, borrowers are taking advantage of low mortgage rates with some lenders, such as Halifax and Scottish Widows, increasing loan-to-income multiples from 4.49 to 4.75 per cent for higher earners."
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: "These numbers are very strong but mostly reflect activity of the past few months.
"Since then we’ve noticed, on the ground, how rising interest rates, inflation and energy costs in particular, exacerbated by the war in Ukraine, have taken their toll. There is still plenty of market resilience and demand for correctly-priced houses and flats but increasingly stretched affordability is inevitably putting a break on price growth and transaction numbers."
Gareth Lewis, commercial director of property lender MT Finance, says: "Yet again the gap between supply and demand is pushing up prices. With the cost of living also rising, this is creating more issues in property chains with buyers having to find more money to purchase a property. Those who are trying to move up the ladder are finding it harder still as the trading gap grows wider; while their home has gone up in value, so has the one they are trying to buy so it will cost considerably more.
"First-time buyers are being squeezed left, right and centre, needing more money for a bigger deposit while the cost of living is also going up exponentially. It becomes a vicious circle that should inevitably stem the flow of property transactions.
"Something needs to be done to stimulate the market so that more people are able to buy, with the lack of housing being built in the first place an issue in urgent need of addressing."
