House prices have risen by +8.1% in the year to February, taking the average value to £245,200, a +4.1% increase from February last year (4.2%). This rise in prices comes after a very busy start to the year – while buyer demand has eased slightly compared to January, it remains unseasonably high, with demand for family houses more than twice as high as usual for Q1.
New supply of homes for sale continues to edge up as pandemic led trends continue, up 5% on the five-year average, and as some sellers look to lock in gains. This trend is likely to continue in the coming months, as price growth and high demand triggers more homeowners to make a move.
The rise in new supply has not been enough to offset high levels of activity, so total stock levels remain constrained, which has continued to put upwards pressure on pricing. As a result, price growth ranges from +11.8% in Wales to +3.2% in London over the last 12 months, contributing to cumulative five-year growth in prices ranging from 35% to 6.5%.
The localised nature of the market is demonstrated at a city level too, with Liverpool leading price growth among the UK’s largest cities at +10.3% on the year, and 32% over the last five years. Nottingham follows, registering +9.5% annual growth, and a +36% rise in values since 2017. This contrasts with an annual decline in prices of -0.2% in Aberdeen since February last year, and a -13.5% decline over five years. Affordability levels are a key factor in the spread of price growth across the country. The largest price growth has been registered in markets with highest demand and lower average prices.
