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House price growth picked up to 11.2% in January – the strongest start to the year since 2005, according to figures from lender Nationwide.
It suggested the surge in the cost of living, with inflation at a near 30-year high, had yet to dent housing market activity, the lender said.
The year-on-year pace of growth was faster than the 10.4% seen in December and the strongest since June though Nationwide still thinks this will slow down later in 2022.
Prices rose by 0.8% month-on-month, the sixth such increase in a row, to an average £255,556.
Nationwide’s chief economist Robert Gardner said housing demand had “remained robust” with mortgage approvals still running above pre-pandemic levels even after a surge in activity in 2021 spurred by a stamp duty holiday.
That high level of activity coupled with a low level of properties for sale has helped push prices higher.
But Mr Gardner said: “While the outlook remains uncertain, it is likely that the housing market will slow this year.”
The surge in house prices at a much faster pace than earnings growth has made property much less affordable, something that was “likely to exert a dampening impact on market activity and house price growth”.
Sharp increases in the cost of living, with inflation at 5.4% and set to rise further as expected energy bill increases take hold in the spring, are also putting household finances under strain.
More Bank of England rate rises could dampen the market
Mr Gardner said: “This rapid rise in inflation has been an important factor denting consumer confidence in recent months, especially how people see their own personal financial situation evolving, although as yet, this has done little to…
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Source : skynews
