The office of National Statistics (ONS) said house prices increased by 10.9% around £27000 higher compared to February 2021. The average house prices are now at £277,000 in February 2022 with consistent increases causing an issue for first time buyers to get on the housing ladder.
Most analysts are predicting the market will cool down due to the current economic climate and with the cost-of-living rising. The impact of soaring inflation, higher energy prices, and increasing interest rates will have major effects on the property prices. Over the past four months the bank of England has raised interest rates twice and we could see further rises in the following months to control inflation.
Where Are House Prices Rising the Most?
Wales has seen the most growth so far in 2022, the Office of National Statistics reported a 14.2 % increase in February 2022 to £205,000. In the March house price index Nationwide reported a 15% increase.
England as previously discussed grew by 10.9% with average house prices of £277,000, of which London only had 7% growth. Scotland the house prices increased by 11.7% to £181,000. Northern Ireland had modest rises at 7.9% to £159000.
Times Are Challenging for First Time Buyers
The growth exceeded earnings growth in 2021, and the ratio of house prices to average earnings has increased to record high levels. This is challenging times for first time buyers with a 10% deposit now equivalent to 56% of total gross earnings. Nationwide is currently offering first time buyers 5.5 x the salary equivalent, although this is good news for those who are looking to buy their first home, this is in fact creating a society with more debt.
Mohammed Jamil
BSc (Hons)
Property professional with over 20 years of experience, bringing you the latest property news and regulation.
