UK house price growth remained strong in February 2022, with prices up 10.9% on last year
Commenting on the ONS house price index publication, Jamie Durham, economist at PwC UK, said:
"The UK housing market remained buoyant in February, with prices up 10.9% on last year.
"Price growth was more consistent across regions than has been the case recently. While still the slowest growing region, prices in London increased 8.1% in the year to February - the highest rate since August 2016.
"Such high, persistent price growth has been supported by demand continuing to exceed supply. Strong demand from buyers is underpinned by a range of factors, including a shift in preferences towards properties with more space, accumulation of savings during lockdowns, and relatively low borrowing costs.
"The most significant determinant for house prices at the moment remains the increasing cost of living. The data show prices increased by the highest rate in over 30 years in March. Rising prices have contributed towards a record decline in consumer confidence which, if sustained, may affect whether consumers are willing to make major financial decisions like purchasing a home and could weigh on price growth over the coming months.
"These factors may make lenders more nervous. After a period of relatively easy credit conditions, banks are starting to tighten their affordability tests for new mortgages which could limit how much people are able to borrow and therefore house price growth.
"Overall, while the rising cost of living may weigh on house price growth, demand appears to be resilient. As such, we expect prices to continue to rise in 2022, albeit not at the same rate as we have seen over the last year."
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