London Daily

Focus on the big picture.
Sunday, Jul 13, 2025

Why house prices are rising so fast in a pandemic

Why house prices are rising so fast in a pandemic

UK house prices are soaring. Official figures show they have been increasing at their fastest rate for more than a decade despite the country being gripped by a pandemic.

The UK's biggest building society, the Nationwide, has described the UK housing market as "buoyant".

Potential first-time buyers and movers may have more of a sinking feeling, as some watch the likelihood of owning move further out of reach.

This is what is happening, and why.


House prices in the UK have generally been going up since the financial crisis. The latest official figures, for March, show that trend speeding up.

Property values were 10.2% higher than a year earlier - the fastest annual rate of growth for 14 years.

This map from property portal Zoopla shows that, unlike recent booms, the biggest price rises have been outside of London and the South East of England.


The steepest increases, shown in the darker shades, have been clustered around the central areas of the UK and Wales.

One notable boom area has been Cornwall which, according to property sales search site Rightmove, overtook London as the most popular search destination for property buyers.

Many buyers are engaged in a race for space, according to Nationwide. They want bigger homes with room to live and work, as well as a garden, and easy-to-reach coast or countryside.

The trouble is they are in short supply.


Family homes are more popular, partly because people have reassessed their priorities during Covid lockdowns.

That, and the cladding crisis, have made some city-centre flats less attractive to buyers.

However, prices of apartments are still rising - albeit at a slower rate than houses - and there are some signs of buyers taking the chance to make a move into lively cities as Covid restrictions ease.

All this means lots of homes are being sold, certainly compared with the start of the first national lockdown when the housing market was closed.


The big spike in March came as buyers and sellers rushed to complete deals ahead the stamp duty holiday expiring at the end of the month.

In the end, ministers extended the tax break into the summer. It can save people up to £15,000.

Any saving may well be eroded for buyers because the demand for homes is not being matched by supply.


A lack of homes on the market, when demand from buyers is high, is inevitably pushing up prices.

The result are the kind of scenes in which buyers have queued overnight outside estate agents' doors, and buyers have been putting in offers for properties they have not even viewed.

On top of that, buyers having to pay more are borrowing more. One broker says they are "maxing out" on what they can get from lenders.


That might be affordable when borrowing rates are low.

The final chart shows that there are signs that the rising cost of living is picking up speed. The Bank of England may choose to control that by raising interest rates.

That would make mortgage borrowing more expensive, putting some new property buyers who borrowed to their limit in financial danger.

An income shock, such as the loss of their job, could make that situation a perilous one.

Newsletter

Related Articles

0:00
0:00
Close
Renault Shares Drop as CEO Luca de Meo Announces Departure Amid Reports of Move to Kering
Senior Aides for King Charles and Prince Harry Hold Secret Peace Summit
Anti‑Semitism ‘Normalised’ in Middle‑Class Britain, Says Commission Co‑Chair
King Charles Meets David Beckham at Chelsea Flower Show
If the Department is Really About Justice: Ghislaine Maxwell Should Be Freed Now
NYC Candidate Zohran Mamdani’s ‘Antifada’ Remarks Spark National Debate on Political Language and Economic Policy
President Trump Visits Flood-Ravaged Texas, Praises Community Strength and First Responders
From Mystery to Meltdown, Crisis Within the Trump Administration: Epstein Files Ignite A Deepening Rift at the Highest Levels of Government Reveals Chaos, Leaks, and Growing MAGA Backlash
Trump Slams Putin Over War Death Toll, Teases Major Russia Announcement
Reparations argument crushed
Rainmaker CEO Says Cloud Seeding Paused Before Deadly Texas Floods
A 92-year-old woman, who felt she doesn't belong in a nursing home, escaped the death-camp by climbing a gate nearly 8 ft tall
French Journalist Acquitted in Controversial Case Involving Brigitte Macron
Elon Musk’s xAI Targets $200 Billion Valuation in New Fundraising Round
Kraft Heinz Considers Splitting Off Grocery Division Amid Strategic Review
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
EU Proposes New Tax on Large Companies to Boost Budget
Trump Imposes 35% Tariffs on Canadian Imports Amid Trade Tensions
Junior Doctors in the UK Prepare for Five-Day Strike Over Pay Disputes
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
Bitcoin Reaches New Milestone of $116,000
Biden’s Doctor Pleads the Fifth to Avoid Self-Incrimination on President’s Medical Fitness
Grok Chatbot Faces International Backlash for Antisemitic Content
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
US Imposes New Tariffs on Brazilian Exports Amid Political Tensions
Azerbaijan and Armenia are on the brink of a historic peace deal.
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
Labour Expected to Withdraw Support for Special Needs Funding Model
Leaked Audio Reveals Tory Aide Defending DEI Record
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
×