The latest Nationwide report shows that house prices rose by 1.1 per cent in April taking the year on year rise to 10.8 per cent. Yorkshire house prices saw a 10.3 per cent annual gain taking the average house price in the region to £197,955.
He says: “The average UK house price rose again in April, up by 1.1%, or £3,078, in the month. This was the 10th consecutive month that property values have increased, the longest run of continuous gains since the end of 2016.
“Housing transactions and mortgage approvals remain above pre-pandemic levels and the continued growth in new buyer enquiries suggests activity will remain heightened in the short-term. The imbalance between supply and demand persists, with an insufficient number of new properties coming onto the market to meet the needs of prospective buyers and strong competition to secure properties driving up prices.
“There remains evidence that this demand is centred on larger, family homes, rather than smaller properties such as flats. Over the past year, prices for detached and semi-detached properties have risen by over 12%, compared to just 7.1% for flats. The net cash increase for detached properties, at just under £50,000 over the past year, is nearly five times more than for flats.
“For now, at least, despite the current economic uncertainty, the strong increases we’ve seen in house prices show little sign of abating. Demand in the housing market remains firm and mortgage servicing costs are relatively stable with fixed-rate deals making up around 80% of mortgages on homes across the industry, protecting many households from the effects of rate rises so far.
“However, the headwinds facing the wider economy cannot be ignored. The house price to income ratio is already at its highest ever level, and with interest rates on the rise and inflation further squeezing household budgets, it remains likely that the rate of house price growth will slow by the end of this year.”
He adds that the property market has continued to defy expectations in recent times, with the rate of house price growth accelerating since the end of the Stamp Duty holiday last year.
The rate of annual growth fell slightly in April to 10.8% (from 11.1%), though this partly reflects the strength of the market 12 months ago. Average house prices are now up by £47,568 over the last two years. To put this in context, it took the previous five and half years to make an equivalent leap (+£47,689 between October 2014 and April 2020).
Mr Galley says: "Indeed, average house prices have fallen in just four months since the start of the pandemic. The average monthly gain of 0.9% during the past year is more than double the typical monthly increase seen over the previous decade. At the current rate of growth, it raises the prospect of a typical home hitting £300,000 by the end of this year. However, as outlined above, such a prospect remains unllikely given the forecast economic conditions."
The rate of annual house price inflation in London continues to lag the rest of the UK, with prices now up by 6.2% year-on-year. However, average property values in the capital remain much higher than the rest of the country, with the latest average house price figure of £537,896 a new record for the city.