Thursday, 07 July 2022

House prices hit a new record high

THE latest house price index published by the Halifax shows that UK property prices are still going up fast, but they are expected to slow later in the year.

Average house prices have now gone up by £47,568 over the last two years, and the average property price has reached another new record high of £286,079. This raises the prospect of the average home being worth £300,000 by the end of the year – however this is unlikely, given the current and forecast economic conditions.

Russell Galley, Managing Director of Halifax, said: “The average UK house price rose again in April, up by 1.1 per cent or £3,078. This was the 10th consecutive month that property values have increased, the longest run of continuous gains since the end of 2016.

“Housing transactions and mortgage approvals remain above pre-pandemic levels and the continued growth in new buyer enquiries suggests activity will remain heightened in the short-term. The imbalance between supply and demand persists, with an insufficient number of new properties coming onto the market to meet the needs of prospective buyers and strong competition to secure properties driving up prices.

“For now at least, despite the current economic uncertainty, the strong increases we’ve seen in house prices show little sign of abating. Demand in the housing market remains firm and mortgage servicing costs are relatively stable with fixed-rate deals making up around 80 per cent of mortgages on homes across the industry, protecting many households from the effects of interest rate rises so far.

“However, the headwinds facing the wider economy cannot be ignored. The house price to income ratio is already at its highest ever level, and with interest rates on the rise and inflation further squeezing household budgets, it remains likely that the rate of house price growth will slow by the end of this year.”

The Halifax reported that six out of nine regions in English recorded double-digit annual house price inflation during April, with the biggest increase shown in the southwest.

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