UK house prices surge by £33,000 to reach record highs
This was the highest increase in one year since 2004
Last updated 29th May 2022
The average house in the UK has increased in value by £33,000 in the last year according to new figures.
The price of a typical UK home has climbed to a record high of £265,312.
Average property values grew by 14.3% annually, which is the largest increase since 2004. And remarkably, house prices are now 21% higher than before the covid pandemic in early 2020.
The Nationwide Build Society says price rises are driven by a strong labour market and a low unemployment rate, while prices have also been accelerated by an increase in consumer savings during the pandemic.
Below are the top three areas in the UK which saw the highest house price increases, according to Nationwide.
Cardiff City Center
1) Wales. The average price rose by 15.3% in 2021 to £201,502.
South West Coast
2) South West. The average price rose by 14.4% in 2021 to £300,936
Southwold Pier, Suffolk, East Anglia, UK
3) East Anglia. The average price rose by 14.2% in 2021 to £277,332
Nationwide’s Chief Economist Robert Gardner said; “The continued buoyancy of housing demand may in part be explained by strong labour market conditions. The unemployment rate has continued to trend down in recent months from already low levels. Wage growth has accelerated, though it is running below inflation”.
Mr Gardner also attributed the increase in house prices to “significant savings” accrued during the lockdowns. Nationwide estimates households accrued around £190 billion in deposits, which is equivalent to £6,500 per household.
However, Mr Gardner said it is; “Is important to note that these savings were not evenly spread, with older, wealthier households accruing more of the increase”.
Slowdown in the post
While house prices seemingly defy gravity, experts predict a slowdown in growth.
Head of UK residential research at Knight Frank, Tom Bill said; “Despite the exceptionally strong growth seen over the last year, a housing market slowdown is in the post.
"The cost-of-living squeeze and rising mortgage rates will undoubtedly take their toll on demand later this year. As we move beyond Covid and supply builds, this will also mean that house price growth becomes less eyebrow-raising."
Karen Noye, mortgage expert at Quilter, said: "While house prices so far appear undeterred, the challenging circumstances we are currently facing may finally see the start of a slowdown."