House prices rise at second fastest rate on record

UK house prices rose 12.4% to a new record high of £281,000 in April, marking a £31,000 increase on 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%).

House prices grew 1.1% between March and April, forming part of an average 12.4% annual increase in price.

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The pace of growth was the second highest – after April 2021 – in data going back to 2006, according to the figures from the Office for National Statistics (ONS).

ONS house prices statistician Chris Jenkins said: “While annual growth nudged up again in April, this was mainly due to falls seen at this time last year from changes in the previous stamp duty holiday.

“Wales and Scotland saw the highest growth with London, again, growing the slowest.

“Rental prices continued to grow steadily overall. However, while still lagging other nations and regions, growth in London continues to pick up.”

Myron Jobson, senior personal finance analyst at Interactive Investor, said: “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.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said the slowdown in demand in the housing market is not yet showing in the data.

"Price changes can reflect stock shortages as well as regional and house type variations, as reflected in this, the most comprehensive of all the market surveys.

Read more: UK property transactions rise in May despite signs of housing market cooling

"But its inevitable historic nature means it is not yet showing the softening in demand picked up by other reports over the past few weeks.

"We are seeing increasing nervousness about taking on debt at a time when buyers and sellers have no real clue as to when and how the rising cost of living will start to level out. Nevertheless, continuing lack of choice and strong employment prospects means there is still little chance of significant price changes over the next few months at least."

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