ONS house prices: Home values up 12.4% in April

Annual house price growth in Britain surged again in April after slowing in March, new figures from the Office of National Statistics show.

Property inflation increased 12.4 per cent in the year to April, up from 9.8 per cent growth in March.

It means the average home was worth £281,000 in April 2022, £31,000 higher than this time last year – essentially the average annual wage. 

It also means that more first-time buyers are paying stamp duty on their homes with 26 per cent having to do suggesting they are forking out more than £300,000 to get on the ladder. 

Wales and Scotland were the areas with the biggest growth over the year rising 16.2 per cent in both to an average price of £212,000 and £188,000, respectively.

House prices in England increased 11.9 per cent over the year to £299,000 , while Northern Ireland saw the lowest growth with prices climbing 10.4 per cent to £165,000.

London continues to be the region with lowest annual growth at 7.9 per cent for the year.

Nitesh Patel, strategic economist at Yorkshire Building Society, said: ‘Annual house price growth further accelerated from 9.7 per cent in March to 12.4 per cent in April. 

‘This rise comes on the back of strong mortgage volumes at the end of 2021 and early this year.

‘A key challenge in the current housing market is the lack of supply of homes for sale whilst demand continues to remain strong – there are some tentative signs that this imbalance may be easing.

‘Low borrowing costs and a strong jobs market are key drivers but in the coming months a further deterioration in household finances may take some of the heat out of the market.

‘With the bank rate now at 1.25 per cent this will mean mortgage rates will also rise, though not to levels seen before the financial crisis. As a result, we expect market activity and price growth ease in the coming months.’

Despite being the region with the lowest annual growth, London’s average house prices remain the most expensive of any region in the UK, with an average price of £530,000 in April 2022.

The North East continued to have the lowest average house price at £155,000, followed by Yorkshire and Humber at £208,867.

Kevin Roberts, director of Legal & General Mortgage Club, said: ‘Even following last year’s frenetic levels of activity, it is clear to see that the UK housing market hasn’t yet run out of steam, even if there are signs that momentum is starting to stabilise. 

‘One of the major groups driving activity, and with it house prices, are first-time buyers.

‘Despite the rapidly approaching deadline for the end of the Help to Buy scheme, there are still a lot of options for borrowers with smaller deposits to take their first step on the property ladder. 

‘The availability of high LTV mortgages, for instance, has been vital to supporting these would-be homeowners. ‘

With more first time buyers having to pay stamp duty, the HomeOwners Alliance – a property advice website – has called on HMRC to ‘be bold’ and scrap stamp duty completely for people buying a home to live in.

Currently, first-time buyers paying between £300,000 and £500,000 for their properties pay the tax at 5 per cent on the amount of the purchase price in excess of £300,000, while those buying a property for more than £500,000 pay 2 per cent to 12 per cent.

Paula Higgins, chief executive of the HomeOwners Alliance, said: ‘It’s clear that the stamp duty tax needs to be reviewed to ensure it’s facilitating rather than fettering first-time buyers.’

‘Alongside announcing new initiatives to increase homeownership, the Government needs to increase the existing first-time buyer relief threshold.

‘The relief was introduced in 2017 to reduce the upfront costs for first-time buyers. Fast forward five years and there is a real risk first-time buyers become a taxation cash cow, which can’t be right.’

At a minimum the Alliance says the first-time buyer threshold for paying the tax should be raised from £300,000 to £350,000. 

It also called for stamp duty thresholds to be reviewed every year in line with house price rises.