Buyer incomes have also taken a significant hit. Inflation is still in double digits and pay is not keeping pace with rising food and energy prices.
House prices are pushed up and sustained by supply and demand for homes. There are still not enough homes in Britain to support the growing population. This yawning gap between the housing stock and demand, most acutely felt in London and the south east, is supporting prices. But there is another factor.
As we report, net immigration hit a record high last year. Telegraph readers often argue that migration has helped drive up house prices, yet official statistics and research in this area is out of date and thin at best.
Government analysis published more than a decade ago attempted to put a figure on the effect on house prices – it claimed a 1pc rise in household growth drove up house prices by 2pc nationally.
The report estimated that a 10pc increase in immigration from 1991 to 2016 had boosted house prices by 21pc – an extra £11,000 on the average home.
Yet the government department involved stressed that the analysis was loose at best, and that salary increases were the main driver of property price increases. The research also suggested that if interest rates increased by one percentage point then house prices would fall by around 3pc, and if housing stock increased by 1pc, prices would fall by around 2pc.
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