The Nationwide, the World’s largest Building Society with over 15 million members, has recently reported that house prices in the UK are now 20% higher than they were in February 2020 – the same month the UK was hit by the global COVID 19 pandemic.
The building society, which keeps a close eye on mortgage and property activity as it is larger than all the other UK building societies combined, also says that the average UK home is valued at £260,230, which is an increase of £29,162 over the last year alone.
Nationwide says UK house prices are rising at 12.6% a year. That is an increase from 11.2% in January. And with interest rates and the cost of living continuing to increase this is somewhat of a surprise.
The Nationwide’s chief economist Robert Gardner said: “The continued buoyancy of the housing market is a little surprising, given the mounting pressure on household budgets from rising inflation, which reached a 30-year high of 5.5% in January, and since borrowing costs have started to move up from all-time lows in recent months. The strength is particularly noteworthy since the squeeze on household incomes has led to a significant weakening of consumer confidence.” He continues:
“A combination of robust demand and limited stock of homes on the market has kept upward pressure on prices.”
What this means for Property Investors?
The UK property market currently lacks good quality stock. Demand for property remains high, especially for people looking to relocate from London to growing areas of the UK such as Manchester and Liverpool. It is inevitable that property prices will continue to rise for the foreseeable future.