Monday, 08 August 2022

Average house price rises by £26,000

THE latest monthly house price index report has been published by Nationwide.

It shows that in June, the price of an average UK home rose to a new record high of £271,613, with average prices increasing by more than £26,000 in the past year.

Robert Gardner, Nationwide’s chief economist, said: “UK annual house price growth slowed modestly to 10.7 per cent in June, from 11.2 per cent in May. Prices rose by 0.3 per cent month-on-month, after taking account of seasonal effects – the 11th consecutive monthly increase.

“There are tentative signs of a slowdown, with the number of mortgages approved for house purchases falling back towards pre-pandemic levels in April, and surveyors reporting some softening in new buyer enquiries.

“Nevertheless, the housing market has retained a surprising amount of momentum given the mounting pressure on household budgets from high inflation, which has already driven consumer confidence to a record low.

“Part of the resilience is likely to reflect the current strength of the labour market, where the number of job vacancies has exceeded the number of unemployed people in recent months. Furthermore, the unemployment rate remains close to a 50-year low.

“At the same time, the stock of homes on the market has remained low, which has helped to keep upward pressure on house prices.

“The market is expected to slow further as pressure on household finances intensifies in the coming quarters, with inflation expected to reach double digits towards the end of the year.

“Moreover, the Bank of England is widely expected to raise interest rates further, which will also exert a cooling impact on the market if this feeds through to mortgage rates.”

Most regions are seeing a slight slowing in house price growth. Mr Gardner said: “Our regional house price indices are produced quarterly, with data for Q2 (the three months to June) showing a softening in annual house price growth in nine of the UK’s 13 regions.

“Southern England saw weaker growth than northern England. London remained the weakest performing UK region, with annual price growth slowing to 6.0 per cent, from 7.4 per cent in the previous quarter.

“Our housing market surveys have pointed to the majority of people looking to move to less urban areas. Our research found that predominantly rural areas have seen stronger price growth in recent years than predominately urban areas.”

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