In June alone the average property in the UK rose by 1.8% which is the 12th consecutive monthly rise according to the Halifax House Price Index.
With the annual rate of growth at its highest since late 2004, it’s no wonder the average property price has now reached the record high of £294,845.
Russell Galley, managing director, Halifax, said the UK housing market had defied any expectations of a slowdown.
He said house prices had risen every month over the last year and were up by 6.8% – or £18,849 – so far in 2022, to push average prices to a record high.
“The supply-demand imbalance continues to be the reason house prices are rising so sharply,” he added.
“Demand is still strong – though activity levels have slowed to be in line with pre-Covid averages – while the stock of available properties for sale remains extremely low.”
Can house price growth last?
Despite these very buoyant figures, no one seems to think this kind of growth will continue. Indeed, Russell Galley said they had so far been insulated from the cost-of-living squeeze but will ‘not remain immune from the challenging economic environment’.
He added: “While it may come later than previously anticipated, a slowing of house price growth should still be expected in the months ahead.”
Imogen Sporle, head of term finance at broker, Finanze, said today’s data was ‘extraordinary’. But not extraordinary enough to convince her a crash would be avoided.
“Whether the full crash happens this year or next, it’s coming,” she said.
“Demand in the property market will cool due to painfully high inflation. Inflation is the property market’s nemesis and is hitting sentiment for six.
“Lenders becoming more conservative with affordability is sensible in the current climate but of course this will mean people can borrow less, which means sellers may soon have to price lower.
Alice Haine, personal finance analyst at Bestinvest, agreed a slowdown was coming. “The market’s insulation from the wider challenges facing the economy can only last so long,” she said.
“Peer closer at the data and price rises appear to be driven by demand from higher earners who are using savings built up during the pandemic to snap up larger properties with detached houses rising in price by almost twice the rate of flats over the past years.
“There is wide expectation that the property market will cool this year and the boom in prices, fuelled by ultra-low interest rates and support packages introduced during the pandemic, will finally come to an end.”
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