UK house prices have grown 10.9% since April 2013 – the first time we’ve seen double-digit growth in the nation’s housing market since 2010.
UK prices increased 1.2% in April alone, according to new data from Nationwide.
(In London, meanwhile, the number of homes sold for £1m+ has doubled, and one in four homes are now worth £500,000 or more.)
A lack of supply is threatening the affordability of housing, Nationwide said.
“The upturn in construction of new homes continues to lag far behind the upturn in demand, with the number of new homes being built in England still around 40% below pre-crisis levels (and this was already insufficient to keep up with the increase in the number of households being formed),” Robert Gardner, Nationwide’s Chief Economist, said.
“Earnings growth is beginning to pick up, with wage increases finally outpacing the rise in the cost of living in February. Nevertheless, house price growth is outstripping income growth by a wide margin.
“The risk is that unless supply accelerates significantly, affordability will become stretched.”
He also warned about the impact of the forthcoming Mortgage Market Review (MMR).
“The introduction of Mortgage Market Review (MMR) measures could have an impact on activity levels in the months ahead as the new measures bed down.
“However, underlying demand is likely to remain robust, as mortgage rates remain close to all-time lows and as consumer confidence improves.”