The average house price in the UK has topped a quarter of a million for the first time in history, according to a closely watched industry survey.
Nationwide said its House Price Index found the average price of a property in Britain now stood at £250,311. Price rose another 0.7% in October, or 9.9% on an annual basis.
Nationwide’s Robert Gardner said: “The price of a typical UK home has now passed the £250,000 mark, an increase of £30,728 since the pandemic struck in March 2020.”
Prices have rocketed over the last two years, in part due to a Stamp Duty holiday during the pandemic that created a surge in demand. However, momentum has continued even after that tax break ended.
Gardner said: “Demand for homes has remained strong, despite the expiry of the stamp duty holiday at the end of September. Indeed, mortgage applications remained robust at 72,645 in September, more than 10% above the monthly average recorded in 2019. Combined with a lack of homes on the market, this helps to explain why price growth has remained robust.”
Market participants say the market is still hot.
Guy Gittins, CEO of estate agent Chestertons, said: “Generally, at this point of year, we expect buyer enquiries to tail off but we are seeing the opposite. At the end of last month, we recorded our highest ever number of new buyer enquiries.”
He warned that the outlook for the housing market was “extremely uncertain” due to the end of government support measures, cooling consumer confidence and a looming rise in interest rates.
“Rising interest rates may exert a cooling influence on the market, though the impact on existing borrowers is likely to be modest,” Gardner said.
An increase in the interest rate from the current record low of 0.1% to 0.5% would add £355 to the annual cost of servicing the average floating rate mortgage, Nationwide said. Most borrowers are on fixed rate deals, which will not be affected.
Source: Evening Standard