Turbo-charged housing market - prices still rising 7.5% a year

Another house price index shows a super-charged housing market with prices rising 7.5 per cent in the year to January according to the Office for National Statistics.

Prices rose most starkly in Wales, up 9.6 per cent, followed by England on 7.5 per cent, Scotland at 6.9 per cent and Northern Ireland rising 5.3 per cent.

The North West was the English region which saw the highest annual growth in average house prices, up a remarkable 12.0 per cent. The West Midlands was the lowest on 4.7 per cent.

Across the UK, the average property value in January was £249,000 which was down from a record high of £250,000 in December. However, the average house price in January was still £17,000 higher than in January 2020.

Nitesh Patel, strategic economist at Yorkshire Building Society, says: “The dash for space continues at pace as buyers snap up larger homes, adding upward pressure on prices.

“In the past year the price of detached homes has grown by 8.6 per cent compared to 2.6 per cent for flats – three times the rate.

“Since March 2020, the popularity of detached homes has grown, now accounting for 28 per cent of all home sales, up from 22 per cent. Flats now account for a smaller share at 12 per cent, down from 17 per cent over the period.

“We expect demand to stay at an elevated level relative to supply, and as a result adding further pressure on prices.”

Jeremy Leaf, north London estate agent and the former RICS residential chairman, says: “Though reflecting transactions which were agreed several months earlier, this most comprehensive of all the housing market surveys confirms what we have been seeing at the sharp end – that buyers and sellers, driven by the prospect of taking advantage of the stamp duty concession, paused at the end of last year and the beginning of this. 

“This was partly due to further lockdown restrictions and difficulties of overcoming the huge conveyancing backlog.”