House prices across England and Wales rose by 7.7% in January according to the latest e.surv Acadata house price index, an 1.5% increase on December’s figures.

However the chartered surveyors report shows considerable regional variation. Looking at house prices in each region over a three month period, the West Midlands has seen the strongest growth, with prices rising 12% year on year.

The West Midlands isn’t the only region to see double-digit price growth, with house prices in the South East climbing by 10.3% over this period. 

Wales which had seen the higher price growth over the previous six months has slipped back slightly, but properties in the region have still seen annual price growth of 8.5% – again using the same three-month ‘blended’ average.

At the other end of the scale, there was more sluggish growth in the North East, the East Midlands and the North West where prices rose by 1.1%, 2.3% and 4.4% respectively.

The survey shows that the ‘race for space’ is driving much of the price growth in these regions. This e.surv data shows that detached homes have seen the highest percentage increase in value over the past year, followed by semi-detached and then terraced properties. 

However e.surv notes that the return to work, even on a part-time basis, has helped push up prices in many commuter towns, with a number of towns in the South East, towns such as Guildford, Esher, Farnham and Horsham experiencing a strong pick-up in demand.

E.surv directo Richard Sexton says: “There remains a supply crunch in the UK market. The lack of desirable stock available on the market has not deterred those wanting to move but has thwarted their ability to do so. 

“New buyer registrations have remained strong yet the types of properties in demand — those that offer the potential for home office space or have gardens — are in poorer supply delivering further price support. 

“Adding further pressure is the lack of supply of new housing as developers seek to recover from the impacts of the pandemic on labour and materials and endeavour to meet the government’s expectations of contributing to the remedial costs of cladding.

“While, at first glance, all this might appear to stack up against borrowers, mortgage competition remains keen and attractive long-term fixed rates are available. Combined with potentially substantial lockdown savings, many borrowers still have the wherewithal and desire to invest in new homes as this data is showing.”

E.surv says that it is evident from this data that the housing market continued to display considerable strength at the start of the year, despite losing many of the incentives that carried it forward in 2021.

It says while there are strong regional variations there is little evidence of the anticipated slow down that some had suggested. Indeed, with the continuing shortage of supply – driven in part by the compounding effect of existing owners tending to buy their next home before selling their existing property – the shortage is exacerbated, further fuelling price increase.