House prices 21% higher than pre-Covid

In the last 12 months, the average home has risen in price by £33,000 to £265,312 – with house prices jumping 1.1% or £5,000 in March 2022 alone. This is the eighth monthly increase in a row, as property inflation has hit its highest level since 2004.

Robert Gardner, chief economist at Nationwide, said: “March saw a further acceleration in annual house price growth to 14.3%, the strongest pace of increase since November 2004. 

“Prices are now 21% higher than before the pandemic struck in early 2020.”

Detached properties have soared by almost £68,000, or 23%, since the first quarter of 2020.  Bigger homes away from cities have become more sought after by buyers who can work remotely. 

In comparison, flats have seen the weakest growth, having increased in price by £24,000, or 14%, since the start of the pandemic.

Gardner commented: “Shifts in housing preferences as a result of the pandemic have been a significant driving factor of housing market activity over the past two years”. 

“Last year, our research identified a ‘race for space’ and this was reflected in price trends by property type, with detached homes seeing the strongest growth and flats the weakest”.
  

Regionally, Wales has remained the strongest for Q1 2022, with prices rising by 15.3%.

London has remained weakest, with prices rising by 7.4%, which marks an acceleration from 4.2% growth in the last quarter of 2021.

All English regions saw price inflation accelerate, with the south west remaining the strongest with annual house price growth of 14.4%, which is the highest since 2004. 

This was followed by East Anglia, which saw annual price growth of 14.2%, up from 10.4% in the previous quarter. 

Northern Ireland saw a slight slowing in annual price growth to 11.1%, while Scotland saw a 12% year-on-year rise in house prices, the strongest rate of growth since Q3 2007.

Nationwide said it believes that households collected £190bn more than usual in savings earmarked for housing deposits since the start of the pandemic, or £6,5000 per household.

Gardner said that the strong labour market conditions, coupled with “significant” savings is “likely to have helped prospective homebuyers raise a deposit”.

He added: “Nevertheless, we still think that the housing market is likely to slow in the quarters ahead. 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".