(Nationwide Building Society) UK house prices surged by an annual 11.2% in January, accelerating from a 10.4% gain in December. The gain is the strongest start to the year in 17 years.
On a month-over-month basis, UK house prices increased by 0.8%, marking the sixth straight month of gains.
Property transactions in 2021 were at the highest since 2007 and were 25% above 2019.
Nationwide’s chief economist Robert Gardner attributes the gains in house prices to robust demand amid a rise in mortgage approvals for home purchases which run slightly above the levels before the pandemic.
Gardner says it is uncertain whether the market will cool this year, although he expects slowdowns in housing. He says house price increases currently surpass earnings growth, which could lower affordability.
House affordability is also seen to be affected by rising prices, with the UK consumer price inflation of 5.4% in December taking a toll on disposable incomes.
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