Property Market Monitor: March 2022

UK house prices continue to advance unrestrained, and on average are up £29,000 over the last year[i]. The Nationwide House Price Index rose by 12.6% year-on-year in February, an eight-months high (chart of the month), and fast advancing towards last summer’s 17-year high. Compared to January, prices rose by 1.7%, the fastest monthly price rise since last summer[ii]. According to Rightmove, the price of properties coming to the market increased by 2.3% in February, up by £7,785 in just a month and the biggest monthly jump in pounds recorded by Rightmove in more than twenty years[iii]. The Halifax House Price index saw a similarly robust trend in February: the 10.8% annual rate of growth was the strongest level witnessed since June 2007, pushing the average house price up to another record high of £278,123[iv]. According to the Halifax House Price index, the past twelve months have witnessed the biggest one-year cash house price rise recorded in over 39 years of index history[v].

Chart of the month: Monthly UK house price, annual % change

Source: Nationwide House Price Index, Blend Network

Market Commentary

  • According to Nationwide, a combination of robust demand and limited stock of homes on the market has kept upward pressure on prices. This buoyancy has been described by Nationwide as ‘a little surprising[vi] given the escalating pressure on household budgets from soaring inflation, which reached a 30-year high of 5.5% in January.
  • The Halifax House Price Index points out that two years on from the start of the Covid-19 pandemic, average UK property values have increased by £38,709 (+16%) since February 2020[vii]. This shocking figure is more than the average salary on the UK.  
  • In order to put the price increase of the past two years into perspective, Rightmove points out that average asking prices have risen by nearly £40,000 in the two years since the pandemic started, compared to just over £9,000 in the previous two years[viii].
  • Savills’ latest UK Housing Market Update reports that the market remains hot as continued supply-demand imbalance fuels price growth. They expect this supply-demand imbalance will be the main short term driver of house price growth[ix].

Property Market News

  • Activity in the market remains high: according to TwentyCi as reported in Savills’ latest UK Housing Market Update, property sales agreed in February were 31% above the 2017-19 average. Meanwhile, Bank of England data shows that mortgage approvals in January were 12% above the 2017-19 average[x]. So, demand remains strong and there is still a large pool of buyers actively looking for new homes.
  • Last week the Bank of England (BoE) rose interest rates for a third time in three months to 0.75%, with analysts expecting rates to hit 1% by the summer and 1.25% by year-end. The bank has been under pressure to continue to tighten monetary policy to tame the dramatic surge in inflation that has been intensified by the war in Ukraine.

Figure 1: Annual increase in house prices (cash terms)


Source: Nationwide House Price Index, Blend Network

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Data found in this article are the property of the sourced information. Whilst every effort has been made to ensure this data is correct, Blend Network cannot guarantee there are no errors in the sourced data.

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[i] Source: Nationwide House Price Index, https://bit.ly/37mn34l

[ii] Source: Nationwide House Price Index, https://bit.ly/37mn34l

[iii] Source: Rightmove House Price Index, https://bit.ly/3i3s2ZM

[iv] Source: Halifax House Price Index, https://bit.ly/3J9oCAU

[v] Source: Halifax House Price Index, https://bit.ly/3J9oCAU

[vi] Source: Nationwide House Price Index, https://bit.ly/37mn34l

[vii] Source: Halifax House Price Index, https://bit.ly/3J9oCAU

[viii] Source: Rightmove House Price Index, https://bit.ly/3i3s2ZM

[ix] Source: Savills March UK Housing Market Update https://bit.ly/3JcP3W7

[x] Source: Savills March UK Housing Market Update https://bit.ly/3JcP3W7

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