Average UK house price jumps by £31,000 in a year

However, growing affordability hurdle appears set to stop the runaway housing market in its tracks, says ii, as we comment on the ONS House Price Index.

Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “House prices have gone through the roof, with the price of the average UK home rising by a staggering £31,000 in a year to hit a new record high of £281,000 in April.

“The ONS says much of this growth was due to price falls seen at that time last year from changes in the previous stamp duty holiday, but house prices have also been buoyed by the low stock of homes and strong labour market conditions. The unemployment rate has fallen to its lowest in generations, while wage growth has accelerated - though it is running below inflation.

“The growing affordability hurdle appears set to stop the runaway housing market in its tracks. The cost-of-living squeeze on household incomes is set to intensify, with inflation predicted to hit double digits if energy prices remain high. Rising prices are eating into disposable income, making it harder to save for a deposit, while the recent hikes in interest rates and the likelihood of more in the near future to rein in inflation have driven up the cost of mortgages. Fast-rising rents are not offering any relief and could keep some wannabe homeowners in the hunt for a home for longer than they would like.”

Key points

• UK average house prices increased by 12.4% over the year to April 2022, up from 9.7% in March 2022.
• The average UK house price was £281,000 in April 2022, which is £31,000 higher than this time last year.
• Average house prices increased over the year in England to £299,000 (11.9%), in Wales to £212,000 (16.2%), in Scotland to £188,000 (16.2%) and in Northern Ireland to £165,000 (10.4%).
• London continues to be the region with the lowest annual growth at 7.9%.