The housing market has had its strongest start to the year since 2005, according to an index.
Annual house price growth increased to 11.2 per cent in January 2022, accelerating from 10.4 per cent in December 2021, Nationwide Building Society said.
Robert Gardner, Nationwide’s chief economist, said: “Annual house price growth accelerated to 11.2 per cent in January, the strongest pace since June last year and the strongest start to the year for 17 years.
“Prices rose by 0.8% month-on-month, after taking account of seasonal effects, the sixth consecutive monthly increase.”
Across the UK, the average house price in January was £255,556.
Mr Gardner added: “While the outlook remains uncertain, it is likely that the housing market will slow this year. House price growth has outstripped earnings growth by a wide margin since the pandemic struck and, as a result, housing affordability has become less favourable.
“For example, a 10% deposit on a typical first-time buyer home is now equivalent to 56% of total gross annual earnings, a record high. Similarly, a typical mortgage payment as a share of take-home pay is now above the long run average, despite mortgage rates remaining close to all-time lows.
“Reduced affordability is likely to exert a dampening impact on market activity and house price growth, especially since household finances are also coming under pressure from sharp increases in the cost of living."
Lewis Shaw, founder of Mansfield-based Shaw Financial Services : "January was a busy month with lots of activity from first-time buyers looking to take their first tentative steps onto the property ladder.
"Currently, everything is being constrained by staggeringly low property stock levels and I cannot stress how important it is to get prepared before you even think about looking to buy.
"With some properties having upwards of 20 offers within a day of hitting the market and many deals going to sealed bids the early bird catches the worm. Even with rates on the rise, the allure of homeownership is stronger than ever due to the relentless increase in the cost of renting.
"2022 is set to be another bumper year, and even with the spectre of inflation haunting us, anyone thinking prices are going to come down any time soon will be sorely disappointed."
