Your house made almost as much as you did last year, according to the latest Halifax House Price Index

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, comments on the publication of the March Halifax House Price Index, showing Your house made almost as much as you did last year.

Key points from publication:

In March, house prices were up 11% in a year, to a record high of £282,753.
They’re up £28,113 in a year. Average earnings are £28,860.
House prices saw their biggest monthly jump for six months, up 1.4%.
In the two years since the onset of the pandemic, prices have risen 18.2%, or £43,577.
Over that time, flats are up 10.6% (£15,404) and detached houses 21.3% (£77,717).

Sarah Coles says:

“Your home made almost as much money as you did last year. But while homeowners might feel better off on paper, for anyone trying to get onto the ladder, or move up it, this is pushing properties even further out of reach. And right now may not be a sensible time to stretch yourself.

“House prices are up an average of £28,113 in a year, and £43,577 in two years, as demand continued to outstrip supply, and buyers chased after the few properties on the market. For those who are considering trading down, or are happy staying where they are, it makes them feel wealthier, and provides an element of comfort when everything else in life is conspiring to make them less well off.

“However, for anyone saving to get a place of their own, this means you’re having to run to stand still. If you’re trying to get a 10% deposit together, you would have had to save £2,811 more just to be in the same position you were a year earlier. At times like this it’s worth getting any help you can, and for those aged 18-39, saving to buy their first property, who have a year until they plan to do so, a Lifetime ISA can help enormously. You get a 25% bonus on everything you put away, so if you save the full £4,000 a year, you get a free £1,000 from the government. You still have a an awful lot of work to do in order to save for a property, but at least you’re not doing it on your own.

“Runaway house prices are also causing problems for second steppers, because the price of houses is stretching way ahead of flats. The average price of a flat is up just £15,404 in a year while the average detached house rose in price by £77,717. It means it takes an enormous stretch to get from one to the other.

“And right now may well not be a sensible time to stretch yourself. While prices are still rising robustly right now, there’s every chance that soaring bills and rising interest rates will take their toll in the coming months. And quite aside from whether or not on paper your home continues to gain value, there’s the question of what you can afford. You need to ask yourself whether now is the time to be taking on a bigger, more expensive loan, when the price of everything else is going through the roof, and tax hikes are shrinking your pay packet.”

Kindly shared by Hargreaves Lansdown

Main article photo courtesy of Pixabay