UK House Price Growth Moves Into Double Digits In April

May 9, 2014

Is this the biggest house price spike there’s ever been? Well, maybe not ever – but certainly in the last four years. Figures published by Nationwide have shown that this April, growth in UK home values hit double digits for the first time in four years, with average prices increasing 10.9% compared to last year.

The latest House Price Index of the country’s largest building society also revealed that house prices gained 1.2% in monthly terms after scoring a 0.5% rise in March. A typical home in the country had a price tag of ¬£183,577 in April, up from ¬£180,264 the previous month.

The annual growth rate was the strongest since June 2007, before the onset of the global financial crisis. Nationwide warns that residential property could become even less affordable for local households if the trend continues.

Growth in incomes is starting to speed up, with wage hikes exceeding the increase in the cost of living in February, Nationwide’s chief economist, Robert Gartner, said. However, home value growth is surpassing earnings growth by a huge margin, potentially leaving more property out of buyers’ reach unless supply expands significantly, he noted.

Nationwide’s figures, based on mortgage transactions approved by the society, pointed to a strong increase in house prices in the South of England, particularly in London and the South East. Values in the capital, for instance, were roughly 20% higher in the first quarter of the year compared to pre-crisis levels. In the UK as a whole, prices were still 2% lower than before the credit crunch.

Nationwide’s figures were published a day after a senior official at the central bank told MPs that failing to curb price growth in the residential property market would have a devastating impact on the country’s financial health, the Financial Times said.