UK house prices continued to rise in June, rising 13%

House prices in Britain rose 13 per cent in the year to June, taking the median house price to £294,845.

It’s the highest annual growth rate since 2004, according to the latest Halifax Home Price Index.

Prices rose 1.8 percent in June alone, up from 1 percent in May, making it the 12th consecutive month of price inflation.

Northern Ireland experienced the strongest growth in house prices in June, with an average house rise of 15.2% to £187,833.

Overall house prices are up 6.8% or £18,849 in cash terms so far in 2022.

However, experts say there are signs that growth could start to slow as economic turmoil begins to weigh on the housing market.

Russell Galley, Halifax’s managing director, said: ‘The imbalance between supply and demand continues to be the reason why house prices are rising so sharply.

“Demand remains strong, although activity levels have slowed to be in line with pre-Covid averages, while the stock of properties available for sale remains extremely low.

‘Of course, the housing market will not remain immune to the challenging economic environment.

“But for now it continues to demonstrate, as it has in recent years, the unique combination of factors that affect prices.”

“One of them continues to be the big shift in demand toward larger properties, with median prices for single-family homes rising nearly twice the rate of apartments over the past year (13.9 percent vs. 7.6 percent). “.

Galley added that inflationary pressures and higher interest rates will weigh on the housing market over time and we can expect a slowdown in house price growth in the coming months.

Keeping up: House prices are up 6.8% or £18,849 in cash terms so far in 2022 after 12 months of consecutive growth

Keeping up: House prices are up 6.8% or £18,849 in cash terms so far in 2022 after 12 months of consecutive growth

Karen Noye, Quilter’s mortgage expert, said the growing cost-of-living crisis would also affect home price growth.

“With inflation expected to hit double digits in a matter of months, the cost of living rising rapidly and more interest rate hikes expected, people are being forced to tighten their budgets,” he said.

“If demand falls as expected, house prices could soften in the coming months and we could see a price reversal in the fall as the true scale of the energy crisis comes to light as temperatures drop.

“While the housing market has thus far defied the odds by taking on the challenges that have been thrown at it in recent years, the cost of living crisis will undoubtedly be its biggest battle yet.”

Northern Ireland experiences the highest growth

Regionally, Northern Ireland continues to experience the highest rate of growth with house prices in the region rising by 15.2 per cent, with an average property price now standing at £187,833.

Wales also continues to post a strong annual growth rate, up 14.3%, with an average property price of £219,281.

Scotland also saw an increase in the annual house price inflation rate, up to 9.9 per cent. A Scottish house now costs an average of £201,549, topping £200,000 for the first time.

London continues to lag other regions in terms of annual house price inflation, which currently stands at 7.1%. However, property prices in the capital still far outpace other regions with an average property price of £547,031.

The number of UK home sales rose in May, according to separate property transaction data from HMRC.

During the month, 109,210 transactions were made, 1.3% more than the April figure of 107,780, on a seasonally adjusted basis.

However, year after year transactions fell. In May 2022, the figure was 5.1% lower than 12 months earlier.

The latest figures from the Bank of England show that the number of mortgages approved to finance home purchases increased by 0.1% in May 2022 to 66,163. Year-over-year, the May figure was 23.4% lower than that of May 2021.

The number of UK home sales rose in May, according to HMRC data

The number of UK home sales rose in May, according to HMRC data

However, rising mortgage rates could also eventually serve to discourage the housing market.

Peter Beaumont, chief executive of The Mortgage Lender, added: “The race to fix is ​​really on for borrowers, as the Bank of England gave signals earlier this week that interest rates could rise further in the next year to combat rising inflation.

‘With price growth still strong, the balance of power in the market remains firm with the seller. Lenders continue to be willing to lend to the right applicants. Those looking to get on the ladder or re-mortgage and who may have more complex circumstances, such as a lapse in their credit score, should consider looking beyond traditional lenders to alternative and specialized options.’

Continued price increases are hitting first-time buyers, too. More of them are paying stamp duty on their homes, with 26 per cent having to, suggesting they are shelling out more than £300,000 to get on the ladder.

The best mortgage rates and how to find them

Mortgage rates have risen substantially as the Bank of England base rate has risen rapidly.

If you’re thinking about buying your first home, moving or remortgaging, or are a buy-to-let landlord, it’s important to get good, independent mortgage advice from a broker who can help you find the best deal.

To help our readers find the best mortgage, This is Money has partnered with independent broker L&C.

Our L&C-powered mortgage calculator can allow you to filter offers to see which ones best match your home value and deposit level.

You can also compare different fixed-rate mortgage durations, from two-year arrangements to five-year arrangements to ten-year arrangements, with monthly and total costs displayed.

Use the tool at the link below to compare the best deals, taking both fees and rates into account. You can also start an online application on your own time and save it as you go.

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