Nationwide and the Bank of England data signal continued housing market momentum

The latest Nationwide House Price Index and Bank of England Money & Credit results show the UK housing market remains robust despite the rising cost of living.

However, with prices surging and the market settling into a ‘new normal’, now’s the time to make bold decisions if you’re serious about moving.

This morning’s Nationwide House Price Index revealed UK house price growth reached its highest level since 2004, with prices increasing by over £33,000 in the last year.

Despite this growth, the housing market has sustained a good level of momentum as demand for property from movers remains strong.

According to the latest Bank of England Money & Credit data released earlier this week, mortgage approvals for house purchases fell slightly to 71,000 in February compared to 73,800 in January. Despite this slight dip, mortgage approvals for February remain above the 12-month pre-pandemic average showing an appetite to move among buyers is still there.

The emergence of a ‘new normal’ market, which feels like an elevated version of what we were previously used to pre-pandemic, has been underpinned by strong buyer demand that continues to outweigh supply.

The ongoing lack of available stock is likely to maintain the upward pressure on prices that we’re currently seeing. As the trading gap also continues to rise, now’s the time to make bold decisions if you’re serious about moving.

Commenting on the data, Jason Tebb, our Chief Executive Officer, explains:

“Remarkably, annual house price growth surged to 14.3 per cent in March, its highest level since November 2004, with prices now 21 per cent higher than before the pandemic struck.

In addition, while net borrowing of mortgage debt by individuals and mortgage approvals for house purchases dipped in February, both remain above the 12-month pre-pandemic average according to the latest Bank of England Money & Credit data, illustrating that positive buyer sentiment continues.

The market continues to adjust to a ‘new normal’, an elevated, faster-paced version of what we saw pre-pandemic. As we approach Easter, we’re seeing an uptick in new homes coming to market, as you’d expect for this time of year. However, this time around appetite from buyers is stronger, as the historic lack of stock means demand is still outweighing supply.

The combination of rising cost of living, interest rates and house prices mean buyers who delayed and missed out on a purchase last year may now be finding that it’s increasingly difficult to afford to move. The trading gap is also a growing concern, with Nationwide reporting that detached houses rose in value by nearly £68,000 between Q1 2020 and Q1 2022, compared with average flats which have risen by £24,000. Those trying to move up the ladder may find that the steps are steeper than before.”

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