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House prices up £24K in a year as affordability is stretched further

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Property price inflation was 9.6% in the 12 months to January 2022, but experts predict a slowdown in the rate of growth
House prices up £24K in a year as affordability is stretched further

UK average house prices increased by 9.6% over the year to January 2022, according to the Office for National Statistics’ UK House Price Index.

The average property price was £274,000 in January 2022, £24,000 higher than a year earlier.

Wales saw the strongest growth of the home nations with prices up 13.9% to £206,000.

Average house prices increased 9.4% over the year in England to £292,000, 10.8% in Scotland to £183,000 and by 7.9% in Northern Ireland to £159,000.

London saw the lowest regional growth at 2.2%, but still has the highest average prices at £510,000.

Affordability squeeze

House prices in England are now 9.1 times average full-time earnings, according to new figures from the Office for National Statistics on housing affordability.

This is a stark rise from 2020, when prices were 7.9 times income.

Housing affordability worsened in 91% of local authorities. This is due to a rise in house prices in 96% of local authorities in England and Wales, compared to an increase in average earnings in only 50%.

The most affordable local authority is Copeland in the North West with house prices at 2.7 times average earnings. The least affordable area is Kensington and Chelsea, in London, with average house prices estimated at 36.5 times average income.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown:, said: “The most recent affordability figures cover 2021, so furlough pay makes them look more dramatic. However, with the average property costing 9.1 times the average salary, alarm bells will be ringing. Compare that to 1997 when properties cost just 3.5 times earnings.”

Chris Hutchinson, CEO of rental platform Canopy, added: “House prices are still on the rise amidst a challenging time for all financially. The current cost of living crisis is undoubtedly adding to the nervousness of many potential homebuyers.

“With limited options available and the fear of not being able to keep up with the mortgage repayments and new home costs, many are choosing to avoid all together for now.”

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