The latest Halifax House Price Index shows that UK House prices increased by 1.8% in June, their twelfth consecutive monthly rise and – according to property website Rightmove – house prices in the UK have hit record highs for a fifth month in a row, with the average asking price in the UK now standing at £368,614.

Halifax report that the annual growth rate of 13% is the highest since late 2004. with Northern Ireland continuing to present the strongest growth in the UK, however Rightmove suggest that things will begin to slow down. They expect affordability constraints to have a greater influence on market behaviour during the second half of the year. Although UK house prices will continue to rise, the rate of growth is slowing – edging up by around 0.3% or £1,113, month-on-month. Despite the cost-of-living crisis and a series of rises in interest rates, the demand for available properties remains very strong.

Talking about the rise, Rightmove’s director of Property Science said:

“Entering the second half of the year, we anticipate some further slowdown in the pace of price rises, particularly given the worsening affordability challenges that people are facing.

“We expect this to bring the annual rate of price growth down from the current 9.7% towards the 5% increase that Rightmove predicted at the beginning of the year.”

According to Rightmove, it currently takes around 150 days on average to complete a sale, once it had been agreed. This is 50 days longer than this time in 2019, possibly due to increased demand. They reported more than 500,000 homes currently sold STC, which is 44% more than this time in 2019 and 39% higher than the pre-pandemic five-year-average.

Leading UK economic forecasting group, The EY ITEM Club also predict a reduction in growth. They envisage UK house prices will rise 8% over the course of 2022, followed by growth of just 1.8% in 2023 and 1.2% in 2024.

Speaking about their prediction, EY UK chief economist, Peter Arnold said:

“In previous economic cycles, a house price contraction would be on the cards with incomes squeezed and a high chance of a market correction after two years of out-sized growth. Instead, house prices are set for a softer landing.”

Economist at the Yorkshire building society, Nitesh Patel, suggested the increase is down to supply and demand:

“Demand for housing has far outstripped supply for years, but it’s not just the quantity of houses we’re lacking, but the type and suitability of properties coming to market – be that new or existing homes.”

Speaking to Property Wire, Managing Director at the Halifax, 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.”

Personal Finance expert at NerdWallet Richard Eagling, suggested that buyers should proceed with caution:

“All the speculation is that the UK property market is on the cusp of a slowdown. These figures continue to defy such suggestions, and they are unlikely to encourage prospective first-time buyers. Month-on-month house price increases are still resolutely in double figures, while aspiring homeowners also have rising interest rates and inflation to deal with, which affects how much they can borrow and save respectively.”

“As such, people looking to buy a property must be sensible in their approach. As with any financial commitment, it is imperative that individuals first evaluate all facets of their financial situation, including their personal savings, credit ratings, outstanding debts, and potential future earnings. Once this is completed, they can adjust their budget and factor in higher costs – and potentially reassess their home search.”

Sold up, counting the profits and ready to make your move? Why not give us a call to see how we can help with a free, no-obligation quote? If you need to store some stuff during the sale or the move, we have secure, stone-built storage facilities right here in the centre of Bridport. We can help you to pack your things and put them straight into storage for you until you’re ready to deal with them, taking all the stress out of moving for you. Give us a call to find out more.

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