The price of a typical home increased by 0.8 per cent in March, while the annual rate of house price growth rose to 5.7 per cent, the strongest pace since February 2015 and up from 4.8 per cent the previous month.
“There has been a pickup in housing market activity in recent months, with the number of housing transactions and mortgage approvals rising strongly” says Robert Gardner, chief economist at Nationwide, which released the figures.
He says the temporary boost in transactions created by the stamp duty deadline helped lift the pace of annual price growth out of the fairly narrow range of three per cent to five per cent that had been prevailing since the summer.
“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” he suggests.
However, the Nationwide says regional disparities continue with a broad north-south divide in terms of absolute prices and ongoing increases.
“One slight variation on this familiar theme was that, for only the fourth time in five years, London did not record the strongest rate of price growth, with the Outer Metropolitan [south east] region occupying the top spot in quarter one of 2016. Nevertheless, London still recorded the second fastest rate of growth, with prices reaching a new all-time high some 52 per cent above pre-crisis levels” says Gardner.