The UK house market shows no signs of cooling down with prices rising at their fastest rate since 2007, according to the Halifax’s latest House Price Index. Year-on-year prices grew by 10.8%, representing the fastest pace of annual growth in a decade-and-a-half and pushing the average house price up to a record high of £278,123. The report revealed that it was the biggest one-year cash rise recorded in almost 40 years of index history for average house prices. The February report also found that monthly house price growth rose to +0.5% (or £1,478 in cash terms) following a slower start to the year, while adding that the squeeze on household finances was “still expected to weigh on the market this year”. February was also the eighth month in a row that property values had increased, prompting Halifax to describe the market as resilient, and that it showed “little sign of easing”. The report added that two years on from the start of the pandemic, average property values have now risen by £38,709 (+16%) since February 2020. Over the last 12 months alone house prices have gained on average £27,215. This is the biggest one-year cash rise recorded in over 39 years of index history. The report identified a lack of supply as one of the main reasons, noting that the “dearth of new properties” being listed had become a long-term trend. The market’s buoyance is in stark contrast with the squeeze on household finances, caused by soaring inflation, rising rates and looming tax increases.

Past performance is not a reliable guide to the future. The value of investments and the income from them can go down as well as up. The value of tax reliefs depend upon individual circumstances and tax rules may change. The FCA does not regulate tax advice. This newsletter is provided strictly for general consideration only and is based on our understanding of law and HM Revenue & Customs practice as of March 2022 and the contents of the Finance Bill. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.