Housing market ‘defies expectations’ with 13% growth

House prices rose 13% on an annual basis in June, Halifax shows in its latest house price index.

This is the highest annual growth rate recorded since the end of 2004.

That translates to a monthly rise of 1.8%, itself the biggest monthly rise since the start of 2007, and puts the average house price at £294,845, according to Halifax calculations.

Providing a regional breakdown, the data shows Northern Ireland recorded the largest annual increase, at 15.2%, taking the average house price to £187,833, while house prices in Wales rose by 14.3%, giving an average house price of £219,281.

House prices in Scotland rose 9.9%, meaning the average house price in the country, at £201,549, topped £200,000 for the first time in the UK. story.

And in England, the South West saw the biggest increases in house prices in June, with a growth rate of 14.2%. Here, the average house price now stands at £308,128.

Halifax chief executive Russell Galley said the UK property market had “defied expectations of a slowdown”.

He says: “The imbalance between supply and demand continues to be the reason house prices are rising so sharply,” adding: “So far, house prices appear to have been largely isolated from the pressure of the cost of living.

“That’s partly because currently the rising cost of living is being felt most by low-income people, who are generally less active in buying and selling homes. High-income earners, on the other hand, will likely be able to use the extra funds saved during the pandemic, with the latest industry data showing mortgages rose by the highest amount since last September.

Garrington Property Finders managing director Jonathan Hopper said: “If Britain is heading into recession and political limbo, the property market hasn’t gotten the memo.

“But such strong price growth is no longer the product of a market overflowing with confidence. Instead, the race is in many cases due to people’s desperation to find housing before interest rates rise further and the cost of living crisis worsens.

“With the UK again without a housing minister and with insufficient housing to meet demand, prices continue to rise. But the price momentum can only last for a while in the face of rapidly weakening consumer confidence. As millions of Britons simultaneously grapple with soaring fuel, energy and food prices, economic gravity will reassert itself in the second half of 2022.”

And IMMO Director Anna Clare Harper comments: “The reason for the 13% annual growth in house prices is simple: there is not enough supply and new supply is too slow to meet growing demand. . This problem is compounded by uncertainty and volatility, which make housing a relatively safe place to put money.

“In the meantime, supply chain challenges include building material price inflation of over 20% and there are ongoing planning backlogs due to the lockdown. real estate, money is still relatively cheap to borrow.

“This imbalance between supply and demand – the fundamental problem – is likely to be made worse by policy tinkering, such as the proposed extension of the reduced right to buy scheme for social tenants to those in housing association housing. It seems foolish to encourage additional demand when we are not meeting existing market demand.”

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