House prices rise despite cost of living fears

The price of a typical home in the North East rose to £153,029 in March – a 10.6% increase over the last year, according to new figures.

The monthly Nationwide Building Society price index also shows the average value of a home nationally climbed to a record high of £265,312 – more than £33,000 up on the price a year ago.

The 14.3% increase in prices was the fastest pace of increase since 2004.

While the increase may be good news for home owners, Nationwide say it is becoming harder to trade up – with price gaps between different property types widening.

Robert Gardner, Nationwide's chief economist, said: "March saw prices rose by 1.1% month on month and 21% higher than before the pandemic struck in early 2020.

"The housing market has retained a surprising amount of momentum given the mounting pressure on household budgets and the steady rise in borrowing costs.

"This may in part be explained by the unemployment continuing to trend down and wage growth has accelerated, though below inflation.

"Nevertheless, we still think that the housing market is likely to slow in the quarters ahead because the squeeze on household incomes is set to intensify, with inflation expected to rise further.”

Nationwide said the average value of a detached home has increased by £68,000 since early 2020, while the average price of a flat has increased by £24,000.

Mr Gardner said: "Consequently, it is becoming more difficult for existing homeowners to trade up, with the price gaps between different property types now at a record high.”