British house prices are rising at the fastest rate since before the global financial crisis as a shortage of sellers continued to pump up the housing market, mortgage lender Halifax said.
House prices rose 0.5% in February in month-on-month terms, Halifax said.
That brought the average price of a house in Britain to £278,123, up 10.8% on a year ago and marking the fastest annual growth rate since June 2007.
The housing market has been hot in Britain – and many other countries around the world – since the lifting of the first coronavirus lockdown in 2020, boosted by demand for bigger properties as more people worked from home.
The British market was also stoked by a tax incentive offered by finance minister Rishi Sunak that fully expired at the end of September, when a jobs support programme also lapsed.
“With new supply limited and mortgage rates still relatively low, we suspect that house price growth will remain buoyant for several months yet,” said Andrew Burrell, chief property economist at consultancy Capital Economics.
In the longer term, Halifax said there were reasons to think house price growth would ease – not least because of surging inflation, tax hikes and rising interest rates.
“These factors are likely to weigh on buyer demand as the year progresses, with market activity likely to return to more normal levels and an easing of house price growth to be expected,” Galley said.