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House prices rising at their fastest rate since 2004 says Halifax

·3-min read
(Joe Giddens/PA) (PA Archive)
(Joe Giddens/PA) (PA Archive)

House prices accelerated at their fastest rate in more than 17 years in June despite the wave of interest rate rises over the past six months, latest figures show today.

Nationally average prices jumped 1.8 per cent in the month to £294,845, the 12th consecutive monthly rise, according to data from leading mortgage lender Halifax. The annual rate of growth hit 13 per cent, the highest since late 2004.

London lagged behind other regions in terms of house price inflation of 7.1% to an average of £547,031.

Despite the remarkable growth Halifax said cost of living pressures should start to slow the rate of price increases in the coming months.

Halifax managing director Russell Galley, said: “The UK housing market defied any expectations of a slowdown, with average property prices up 1.8% in June, the biggest monthly rise since early 2007. This means house prices have now risen every month over the last year, and are up by 6.8% or £18,849 in cash terms so far in 2022, pushing the typical UK house price to another record high of £294,845.

“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, with latest industry data showing that mortgage lending has increased by the highest amount since last September.

“Of course, the housing market will not remain immune from the challenging economic environment. But for now it continues to demonstrate – as it has done over the last couple of years – the unique combination of factors impacting prices.

“One of these remains the 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% vs +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. Our latest research found that the strong rise in property prices over the last two years, coupled with much slower wage growth, has already pushed the house price to income ratio up to 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.”

London continues to lag behind other regions in terms of annual house price inflation (+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.

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