HOUSE prices are defying predictions of a slowdown as desperate buyers bid up offers even in the face of soaring living costs and an economy biffed by war and inflation.
A “race for space” means London prices are growing more slowly than other regions, though it remains the most expensive area in the UK by far.
Nationwide said today that annual house price growth is at 11.6%, the fastest for 17 years, with the South West rising even faster at 14.4%.
Charles Yuille of Willow Brook Mortgages said: "Demand for property here has gone through the roof since the beginning of the pandemic. The M4 corridor has been one-way traffic for the past two years, and that traffic has been moving fast. Bath has often been called West West London by estate agents and never has this been more true.”
Across the country there are more buyers than there are properties for sale, with detached houses in particular demand. That is making trading up from a flat harder than ever.
Flats are up by £24,000 since the start of the pandemic, while detached homes are up £68,000.
The price of a typical flat in London is £428,000, while a detached property in the East Midlands costs £350,000.
Estate agents and mortgage lenders still say house price growth will tail off soon, noting consecutive rises in interest rates from the Bank of England as it tries to subdue inflation.
The Office for Budget Responsibility said last year house prices would fall in 2022 – a prediction that looks increasingly doubtful.
Sundeep Patel at specialist lender Together said: “With the economy buckling, households are shouldering a triple whammy of higher bills, food prices and energy costs, making it increasingly difficult for first time buyers to save enough money to get their foot onto the property ladder.”
Nationwide’s chief economist Robert Gardner 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. A combination of robust demand and limited stock of homes on the market has kept upward pressure on prices.”
The housing market is likely to slow in the coming months, Nationwide forecast.
“The squeeze on household incomes is set to intensify, with inflation expected to rise further, perhaps reaching double digits in the quarters ahead if global energy prices remain high,” Gardner added.
