The industry has been reacting to two price indexes released yesterday by the Office for National Statistics.

They were published on the day it was announced that inflation has taken hold in the UK, with overall the cost of living going up by 7% in the year to March.

This can only get worse as fuel, heating and food price hikes feed through, and we can expect the March and April ONS data to reflect the growing effect on consumer behaviours.

Property cannot be immune from these changes and whilst it may continue for a while to defy the laws of financial gravity, it is only a matter of time before the heat comes out of the markets.

The ONS House Price Index for February 2022 reports that:

UK average house prices increased by 10.9% over the year to February 2022, up from 10.2% in January 2022.

The average UK house price was £277,000 in February 2022, which is £27,000 higher than this time last year.

Average house prices increased over the year in England to £296,000 (10.7%), in Wales to £205,000 (14.2%), in Scotland to £181,000 (11.7%) and in Northern Ireland to £159,000 (7.9%).

London continues to be the region with the lowest annual growth at 8.1%.

In its Private Housing Rental Prices Index for March 2022, the ONS says that:

Private rental prices paid by tenants in the UK rose by 2.4% in the 12 months to March 2022, up from 2.3% in the 12 months to February 2022.

Private rental prices grew by 2.2% in England, 1.6% in Wales and 2.8% in Scotland in the 12 months to March 2022.

The East Midlands saw the highest annual growth in private rental prices (3.8%), while London saw the lowest (0.4%).

Jason Tebb, CEO of OnTheMarket:

“Despite strong headwinds in the form of rising inflation, interest rates and the cost-of-living crisis, a remarkable level of confidence remains in the housing market.

“Speculative sellers coming to market may well find considerable competition for their homes from highly motivated buyers keen to move and take advantage of low mortgage rates while they can.”

Lucy Pendleton at James Pendleton:

“Resolute buyers are keeping the party going while this housing market dances to its own crazy beat.

“The yin and yang of soaring demand and stunted supply continue to provide the backdrop for ongoing rises and a market momentum that is barely believable. It is a parallel universe seemingly unaffected by the roaring headwinds buffeting the economy.

“February’s return to double-digit growth, coupled with the latest painful CPI figures that far outstrip wage rises, are a further kick in the teeth for first-time buyers who must wonder when they will catch a break.

Iain McKenzie, CEO of The Guild of Professional Agents:

“During a time when household bills are increasing for millions of people, coupled with soaring rates of inflation, it’s astonishing that house prices continue to climb.

“There was an expectation that following a slower pace of growth in January, the figures for February would continue to show a cooling down of the market, but there doesn’t seem to be a sign of that anytime soon.

“An annual price change of 10.9% means that the end of incentives such as the stamp duty holiday, in place this time last year, have done little to deter people from wanting to purchase their own home.”

Nicky Stevenson, MD of Fine & Country:

“House price growth continues to move at a rate of knots and it remains unclear whether this marks the apex of this unprecedented boom.

“At the moment, cash-rich buyers appear to be shrugging off the challenges that are mounting in the broader economy, but the picture may change in the summer as lenders reassess affordability tests.”

Jackson-Stops Chairman, Nick Leeming:

“February usually sees a slight increase in prices from January with people refocussing their thoughts on a possible move after the lull around Christmas and New Year. However, house price data for February continues to paint a clear picture of a property market defined by exceptional demand.

“Rises in both the month on month and annual growth figures are significant, especially given the context of rapidly rising living costs, which it appears are not yet impacting demand. These growth levels evidence how powerful the pandemic and successive lockdowns have been in motivating homeowners and aspiring buyers to re-evaluate their lifestyle, and progress purchases despite continued price growth.”

Nathan Emerson, CEO of Propertymark, talking about the sales index:

“The level of housing supply is 32 per cent lower than before the pandemic and demand is up 134 per cent. These latest ONS figures suggest that the market continues to remain extremely competitive but the cost of living crisis may be a key contributor preventing home buyers and sellers coming onto the market due to financial uncertainty.

“However, slight growth in the number of properties coming to the market is being seen which is a positive shift in the right direction as a closing in the gap of supply and demand will enable house prices to start to stabilise.”

In respect of the rental price index, Emmerson added:

“Agents are reporting a record high number of applicants registered in our latest Private Rented Sector Report which is a 73 per cent increase from the previous year.

“74 per cent of agents are reporting rent rises due to the lack of private rented housing supply and in some cases, properties are receiving in excess of 20 per cent more in rent per calendar month.

“This is a real concern for households across England and Wales and the latest ONS Private Housing Rental Prices Index reiterates our growing concerns over the affordability.

“The UK Government has a blatant disregard for the importance of the private rented sector, continues to hit landlords in the pockets and provides no incentives for those providing good quality homes to remain in the sector.

“Given that the cost of living crisis is having a detrimental impact on many households, they must urgently prioritise introducing further investment in both the private rented and social sectors.”