Where is house price inflation hitting hardest? Regions are the driving force behind the surge in values as the pandemic property boom continues
- Homes in Wales and the North West have led Britain’s pandemic property boom
- Two regions saw their strongest growth in a decade between March 2020-2021
- Typical British house now costs £252,765 after prices climbed by 5.7 per cent
- But house prices in Wales grew 10.6 per cent and 8.4 per cent in North West
House prices in Wales and the North West have led Britain’s pandemic property boom as homebuyers shunned cities in favour of more space.
Both regions saw their strongest growth in more than a decade between March 2020 and 2021, according to the Halifax House Price Index.
The typical British house now costs £252,765 – a new record – after prices climbed 5.7 per cent between the first three months of 2020 and the same time this year.
In Wales, house prices grew 10.6 per cent between the first quarter of 2020 and the same time this year – the biggest rise since 2005 – taking the cost of the average property to £185,920.
And in the North West, which recorded its best growth in 14 years, prices climbed 8.4 per cent to an average of £194,374.
Paul Smith of data firm IHS Markit, which produces the index, said: ‘Market activity continues to be supported in the main by shifting preferences among buyers for greater space, especially among those in secure employment, amid expectations that working from home will continue in at least a hybrid form.
‘With the stamp duty holiday extended, mortgage availability support for first-time buyers increased and growing expectations that economic performance will improve markedly, price pressures are set to remain elevated into the autumn at the very least.’
Greater London is still the costliest region, with a typical home more than £505,000, but an average price rise of only 2.1 per cent.
Rival mortgage lender, Nationwide, recently said prices had risen by around £1,000 every month since the start of the pandemic last year, although it reported a slightly smaller 5.7 per cent annual increase in March.
In June 2020, annual price growth slipped into negative territory thanks to the original lockdown.
However, values are now up nearly £16,000 since then, meaning a typical home has grown nearly £2,000 a month since last summer.
What’s going on? Nationwide’s index for average house prices since March 2011
At the Budget on 3 March 2021, Chancellor Rishi Sunak gave the property market a further boost by extending the stamp duty holiday to the end of June.
But, in many parts of the country, limited housing stock levels are pushing up prices higher and potentially wiping out stamp duty savings.
Looking ahead, Nationwide’s experts think the housing market looks set to stay ‘buoyant’ for the next six months, but is on track to slow, ‘perhaps’ sharply’ by the end of the year as government support arising out of the pandemic falls away.
Both Nationwide and Halifax’s indices are based on mortgage approvals, and are seasonally-adjusted to iron out elements that may skew the data.
Government support measures and a stamp duty holiday, which was set to end in March but was extended until September with the exemption threshold lowering in July, have been key to bolstering the housing market, according to Halifax.