1st April 2016
The average home increased in value by over £10,000 in the past year to push the price past £200,000 for the first time.
Figures from Nationwide reveal the average property value gained £10,797 in March, as prices rose by 5.7% compared to March 2015 – the fastest pace of growth in 13 months.
The jump in value means the average UK property price has broken the £200,000 barrier, as the average price was £196,930 a month before.
There are stark regional differences however, with the average house in the south now worth over double the average house in the north.
The average property in the south is £313,670 compared to £150,917 – a gap of £163,000.
In the London commuter belt, prices jumped 12.2% year-on-year in the first quarter and houses in the capital soared 11.5%.
In the north, prices were down 1.1% year-on-year, further exacerbating the north-south divide.
The increase in prices was also fuelled by buy-to-let investors who were rushing to purchase homes before changes to stamp duty. From today, those purchasing a second home will have to pay 3% more in stamp duty, adding £6,000 to the cost of buying a £200,000 property.
Robert Gardner, Nationwide chief economist, said of the better-than-expected March price rises: ‘This is likely to have been driven, at least in part, by upcoming changes to stamp duty on second homes, where buyers have brought forward purchases in order to avoid the additional tax liabilities.
‘The pace of house price growth may moderate again once the stamp duty changes take effect.’
However, there are factors keeping house prices high, including a drop in unemployment, wage growth, low interest rates and a shortage of homes.
‘It is possible that the recent pattern of strong employment growth, rising real earnings, low borrowing costs and constrained supply will keep the demand/supply balance tilted in favour of sellers and maintain pressure on price growth in the quarters ahead,’ said Gardner.