The average house price in the UK has risen by £24,000 in the year to March, according to new data.
Property experts said the spike is due to a supply shortage but that rising interest rates and a potential recession in the future could slow the rate of price growth over the next months. Official figures released by the Office for National Statistics (ONS) show that the typical property value was £278,000 in March 2022 – following a £24,000 annual increase.
The annual growth rate in March, at 9.8 per cent, was lower than an 11.3 per cent annual increase in February. Average house prices increased over the year in England to a record level of £298,000 (a 9.9 per cent annual increase), in Wales to £206,000 (11.7 per cent), in Scotland to £181,000 (8 per cent) and in Northern Ireland to £165,000 (10.4 per cent).
READ MORE: Parents warned school meal sizes may get smaller due to cost of living crisis
In England, the East Midlands had the highest annual house price growth, with average prices increasing by 12.4 per cent in the year to March. Meanwhile in London, the average prices increased by 4.8 per cent over the year to March, making it the lowest annual house price growth.
However, with an average price of £524,000 in March, London’s average house prices remain the most expensive in the UK.
ONS house prices statistician Ceri Lewis said: “Our latest figures continue to show house prices increasing and remaining at record levels.
“UK rental prices are also still growing rapidly across all nations and regions. After the falls seen last year, London rental prices continue to pick up with their strongest growth since November 2020.”
A separate report from the ONS showed private rental prices paid by tenants in the UK rose by 2.7 per cent in the 12 months to April, up from 2.4 per cent in the 12 months to March. Private rents increased by 2.5 per cent in England, 1.7 per cent in Wales, and 2.9 per cent in Scotland in the 12 months to April 2022.
Marc von Grundherr, director of estate agent Benham and Reeves, said: “The winds of change are certainly starting to blow and while this building economic headwind is yet to derail the phenomenal rates of house price growth being seen across the UK on an annual basis, it certainly seems as though dark clouds are gathering on the horizon.”
Many estate agents reported a surge in buyer inquiries and sales compared to the same time period last year. It comes after the ONS said Consumer Prices Index inflation rose to 9 per cent in the year to April, up from 7 per cent in March.
Andrew Montlake, managing director of mortgage broker Coreco, said: “Nine per cent inflation, rising interest rates and a potential recession ahead will impact demand while lenders are becoming ever more cautious, which will restrict what people can borrow.
“This will almost certainly see the rate of price growth slow during 2022 and into next year. Only the entrenched lack of supply can prevent prices from falling.”
