The cost of living crisis has meant we’ve had to dig deep to afford even the everyday basics – and now, the dream for many young people hoping to buy their own house is looking even more impossible.
House prices in the UK have now surged to record highs, having leapt by nearly £30,000 in the last 12 months.
The average house price is now thought to stand at £260,230, Nationwide Building Society has revealed.
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This is around 20 per cent higher than prices recorded back in February 2020 – and equates to a cash increase of a staggering £44,000.
House price growth has also vastly outpaced earning power, with the average house price now 6.7 times higher than average earnings.
Robert Gardner, Nationwide’s chief economist, said: “Annual house price growth accelerated to 12.6 per cent in February, up from 11.2 per cent in January and the strongest pace since June last year.
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“Prices rose by 1.7 per cent month-on-month, after taking account of seasonal effects, the seventh consecutive monthly increase.
“The price of a typical home rose above £260,000 for the first time in February, an increase of £29,162 over the past 12 months.
“This is the largest ever annual increase in cash terms since the start of our monthly index in 1991.
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Gardner said that the housing market has remained strong despite the uncertainty caused by lockdowns and the coronavirus pandemic, with mortgage approvals still at pre-pandemic levels.
He added the strength of the housing market may be surprising, particularly concerning the increasing concern about the cost of living crisis seeing high energy bills and increasing food costs.
“The continued buoyancy of the housing market is a little surprising, given the mounting pressure on household budgets from rising inflation, which reached a 30-year high of 5.5 per cent in January, and since borrowing costs have started to move up from all-time lows in recent months,” Gardner added.
“The strength is particularly noteworthy since the squeeze on household incomes has led to a significant weakening of consumer confidence.”
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There have been calls for homeowners to be more upfront about how they’ve afforded their properties, thanks to the widespread misconceptions about the housing markets.
Adding salt to the wound, Kirstie Allsopp, known for fronting Location, Location, Location, sparked outrage and infuriated her readers when she declared that young people should simply give up their Netflix subscriptions, gym memberships and luxury holidays to get onto the property ladder.
Kimberley Bond