International News

House prices in the UK rose at the fastest annual rate in 18 years last month as demand – especially for larger homes – continued to outstrip the number of properties on the market.

Halifax, one of the country’s biggest mortgage lenders and part of Lloyds Banking Group, said the market “defied any expectations of a slowdown”, with prices rising year on year in June by 13%, the highest since late 2004. Prices rose 1.8% compared with May, which was the biggest monthly rise since early 2007.

A typical property now costs £294,845, another record high, as prices continue to rise despite the cost of living crisis. House prices have risen every month over the past year and have climbed by 6.8% so far this year, or £18,849 in cash terms.

Russell Galley, the managing director of Halifax, said: “The supply-demand imbalance continues to be the reason house prices are rising so sharply. 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.

“Property prices so far appear to have been largely insulated from the cost of living squeeze. This is partly because, right now, the rise in the cost of living is being felt most by people on lower incomes, who are typically less active in buying and selling houses. In contrast, higher earners are likely to be able to use extra funds saved during the pandemic.”

He said the housing market would not remain immune from the economic slowdown. But for now it was being supported by a “huge shift” in demand towards bigger properties, with average prices for detached houses rising by almost twice the rate of flats over the past year (13.9% versus 7.6%).

“In time, though, increased pressure on household budgets from inflation and higher interest rates should weigh more heavily on the housing market, given the impact this has on affordability,” Galley added. He said the house price-to-income ratio had reached a record level.

“So while it may come later than previously anticipated, a slowing of house price growth should still be expected in the months ahead.”

Two senior Bank of England officials said on Wednesday the central bank would “do whatever is necessary” to prevent the rocketing cost of living from becoming a lasting inflation problem, hinting at further, and possibly bigger, rate hikes. The Bank has raised interest rates five times since December to 1.25%.

Northern Ireland continues to post the strongest annual growth in house prices, up by 15.2% to an average property price of £187,833, Halifax said. Wales is close behind with 14.3% annual growth to an average price of £219,281.

A Scottish home now costs an average of £201,549, breaking through £200,000 for the first time in history, and up 9.9% on June last year.

London continues to lag behind other regions with annual price gains of 7.1%, though with an average property price of £547,031 it remains by far the most expensive place in the UK to buy a home.

Retrieved from ：https://www.theguardian.com/business/2022/jul/07/uk-property-prices-rise-at-the-fastest-rate-for-18-years (7 July, 2022)

The information provided on this website is for reference only. C21 International shall not be liable for any errors, omissions, misstatements, or misrepresentations (express or implied), concerning any Information, and shall not have or accept any liability, obligation, or responsibility whatsoever for any loss, destruction, or damage (including without limitation consequential loss, destruction or damage) howsoever arising from or in respect of using, misusing, inability to use, or relying on the Information.