UK house prices rising at their fastest rate since 2007

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The average house price has hit a new record high of £278,123, following the eighth successive month of growth.

Halifax’s latest House Price Index reports that prices are rising at their fastest rate since 2007, with growth up by 10.8%, adding £1,478 to the cost of the average home in February.

Seven UK areas are now seeing double-digit annual house price inflation. Wales is the strongest performing nation or region, with annual house price growth of 13.8%, pushing the average property price to £207,184. Meanwhile, the South West recorded growth of 13.4%, with by far the strongest quarterly growth (3.5%) of any region. Halifax says it’s notable that both areas benefit from an abundance of more rural, scenic living which has been in demand throughout the pandemic.

Upward trend

London remains the weakest performing area of the UK, although the capital continued its recent upward trend with annual house price inflation now standing at 5.4%, its strongest level since the end of 2020.

MD Russell Galley says average property values have risen by £38,709 (+16%) since February 2020 and over the last 12 months, gained on average £27,215 – the biggest one-year cash rise recorded in 39 years of the index’s history. He adds: “Lack of supply continues to underpin rising house prices, with recent industry surveys showing a dearth of new properties being listed, now a long-term trend.”

Galley says the war in Ukraine along with surging oil and gas prices and peaking inflation are all likely to impact on confidence and already stretched household incomes. “These factors are likely to weigh on buyer demand as the year progresses, with market activity likely to return to more normal levels and an easing of house price growth to be expected.”

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