The price of a typical UK home reached a record high of £265,312 in March, the building society’s latest monthly House Price Index shows, with prices increasing by more than £33,000 over the past year. Prices are now 21% higher than before the pandemic began in early 2020.
Robert Gardner, chief economist at Nationwide, said: “The housing market has retained a surprising amount of momentum given the mounting pressure on household budgets and the steady rise in borrowing costs.
Strong labour market conditions have also helped support the property market, combined with homebuyers being able to save more towards their deposits during lockdown periods.
“We estimate that households accrued an extra c£190bn of deposits over and above the pre-pandemic trend since early 2020, due to the impact of Covid on spending patterns,” said Mr Gardner. “This is equivalent to around £6,500 per household, although it is important to note that these savings were not evenly spread, with older, wealthier households accruing more of the increase.”
However, the building society expects the market to slow in the months to come, as incomes become increasingly stretched due to the current cost of living crisis. Soaring inflation means that the Bank of England is likely to raise interest rates further this year which will also have an impact as increases feed through to mortgage rates.
Wales strongest performing regionHouse prices were up 15.3% in Wales year-on-year, making it the strongest performing region for annual house price growth.
Scotland was the second-best performing country in the UK, with annual house price growth up 12%, compared to 11.6% in England and 11.1% in Northern Ireland. The South West was the strongest performing region in England, recording annual house price growth of 14.4%, up from 11.5% in the previous quarter. The weakest performing region in England was London, with annual house growth up to 7.4%.