UK house prices have spiked in their fastest rise in 17 years, with the average price per home increasing £33,000 over the last year.
The Nationwide Building Society confirmed that house prices cost £232,134 on average in March 2021 and grew 14% to £265,312 in the past 12 months.
Nationwide chief economist Robert Gardner added that the recent 1.1% month-on-month increase marked the eighth consecutive month of price growth in the housing market.
House prices have hit a 21% rise since the Covid-19 pandemic emerged in 2020, however the market has retained an unexpected level of momentum against the background of rising borrowing costs and shrinking household budgets.
“The number of mortgages approved for house purchase remained high in February at around 71,000, nearly 10 per cent above pre-pandemic levels,” said Gardner.
“A combination of robust demand and limited stock of homes on the market has kept upward pressure on prices.”
Gardner also said that the increased consumer savings over lockdown contributed to steady housing market demand.
“The significant savings accrued during lockdowns is also likely to have helped prospective homebuyers raise a deposit.”
“We estimate that households accrued an extra (around) £190 billion of deposits over and above the pre-pandemic trend since early 2020, due to the impact of Covid on spending patterns.”
Gardner caveated his comment with the insight that older, wealthier households were maintaining the majority of the savings advantage.
However, the housing market is predicted to shrink in coming months as household budgets feel the pressure of climbing credit card debt and short-term borrowing surge on the back of rising inflation and spiking energy prices.