Figures out yesterday delivered a shot in the arm for homeowners with prices at their healthiest start to a year since 2005.
Average selling prices rose by 0.8 per cent in January and it means they are 11.2% above where they stood a year earlier, according to data from Nationwide’s house price index.
Now Jonathan Rolande, from the National Association of Property Buyers, says this “golden period” for house prices is only going to continue.
He said: “I see little change before the Summer. Until then we can expect to see prices continue to grow. We are in a golden period for house prices and this will stay in place for many months.
“Everyone is asking how much longer and although this is very hard to predict it is important to note that the boom has survived Brexit and Covid. I suspect the general squeeze will slow the market towards the end of 2022 as the pain of increased costs everywhere is felt in full. It may begin with tenants unable to pay the current high rents. That will worry investors who may begin to sell their stock, adding more property to the market when demand is waning. This could begin the suppression of price increases but we have many months until we arrive at that point.
“One of the key reasons for this is plentiful mortgage deals and a slight easing of lending criteria. And rates will still be cheap even if they do go up a little tomorrow. One rate available this week is just 0.85% fixed for two years. People in general will borrow as much as someone will lend them.
“The rise is also linked to the continued shortage of homes. Some sellers, especially landlords, are holding property waiting for prices to increase. Also low savings rates mean property yields still look good.
“The race for space still continues with many now resigned to WFH long term so access to train links and offices are now less important, which is allowing people to be more mobile.”
The average UK house price now stands at £255,556, up from £254,822 in December.
Robert Gardner, Nationwide’s chief economist, confirmed on Tuesday that it was “the strongest pace since June last year and the best start to the year for 17 years”.
He explained: “Housing demand has remained robust. Mortgage approvals for house purchases have continued to run slightly above pre-pandemic levels, despite the surge in activity in 2021 as a result of the stamp duty holiday, which encouraged buyers to bring forward their transactions to avoid additional tax.
“Indeed, the total number of property transactions in 2021 was the highest since 2007 and around 25% higher than in 2019. At the same time, the stock of homes on estate agents’ books has remained extremely low, which is contributing to the continued robust pace of house price growth.”