House price inflation accelerates in February
The Nationwide released their house price index for February 2022 this morning
What they said
Average UK house prices exceed £260,000 for the first time
House price growth accelerating, increasing to 12.6% in February
Price of a typical home 20% (£44,000) higher than in February 2020
That house prices rose in January, after the bumper year of 2021, was a surprise, but the fact that they have risen again, at a faster rate in February is perplexing. No one seems to have told the housing market that interest rates and the costs of living are also rising.
The annual increase of £29,162 is the largest annual increase reported by the Nationwide since the start of their monthly index in 1991.
We had thought that it was the stamp duty holiday that fuelled the recent house price growth, but the stamp duty holiday exited stage left in October last year. The holiday was certainly a catalyst, but has it created an unstoppable monster?
With housing affordability already stretched, another month of house price rises will push many aspiring homebuyers further away from the housing ladder, increasing the workload of those seeking to level up the housing market.
Working from home might still be with us and the race for space is not fully over, but as we increasingly return to our offices and our daily commutes, the pipe dreams of more space, more free time and less stress will be eaten up by the daily round (and grind) of common task and, increasingly, the daily commute. Maybe as start to put COVID fully behind us house price growth will pause as we get back to life and back to reality.