House prices in the UK increased 7.8% in June on an annual basis, with the average property in the UK being valued at £286,397, according to the latest UK house price index data from the Office for National Statistics (ONS).
The data found that house prices in the UK have on average increased by 1% since May this year.
In England, house prices have risen 0.9% between May and June and went up by 7.3% annually taking the average property price to £304,867.
House prices in London went up by 1.9% between May and June and increased 6.3% annually taking the average property price to £537,920.
Meanwhile, in Wales house prices increased by 0.6% between May and June and went up by 8.6% annually taking the average property price to £213,091.
On a regional basis in England, the East of England experienced the greatest increase in its average property value over the last 12 months with a movement of 9.7% while the North East saw the lowest annual price growth with an increase of 3.6%.
Yorkshire and the Humber saw the most significant monthly price fall with a movement of –0.4% since May and the North West experienced the greatest monthly growth with an increase of 2.1% since May.
These figures are released after the ONS revealed this morning that inflation in the UK reached 10.1% in July, setting a fresh 40-year record high.
The latest figure is driven by a 43.7% rise in the price of motor fuels year-on-year and an increase of 12.7% in the price of food and non-alcoholic beverages.
Looking at the latest ONS market data for June, Propertymark chief executive Nathan Emerson says “it’s not surprising that an increase is again being seen in the average house price”.
“As of this month, however, for the first time since the recent hikes in prices, data has shown that the average is starting to decrease.”
“Despite this slowing in the market, agents continue to report increases in the time taken to exchange, with our latest Housing Market Report showing that 41% of sales took 17 weeks or more to go through, compared to just 10 per cent pre-pandemic.”
Together head of personal finance intermediary sales James Briggs explains: “Despite today’s increase, economic uncertainty and sluggish growth continues to put pressure on people’s finances, potentially deterring prospective buyers from pursuing their property plans this year.”
“With higher interest rates, increasing costs and rising inflation, buyers and sellers may continue to find prices begin to drop as demand softens. Given the potential of a recession, how long this will last is not yet clear. The market remains volatile, and we can expect much more price activity as we enter the winter months.”
IMMO director Anna Clare Harper says: “This slowdown in price growth will be welcomed by those struggling with affordability constraints since the average house price remains over 10 times average annual individual earnings.”
“It also makes sense. House prices and house price growth figures both reflect and affect consumer and investor confidence.”
“House prices are the result of supply and demand. Interest rate rises and talk of recession are cooling demand. In recessionary times and when interest rates are higher, demand for buying properties tends to fall. However, we all still need a roof over our heads. Demand for housing does not fall. Demand shifts from buying to renting properties, which offers more flexibility.”
“Unfortunately, the shortage of supply of both properties for ownership and for rent continues. For this reason, the slowdown in growth should not be taken as an indicator of a major crash to follow.”
Key Mortgages director Ryan Joyce adds: “While the June annual growth rate has been skewed by the stamp duty holiday, it almost certainly reflects the general direction house prices will be headed given the extreme economic headwinds ahead. Though there’s still demand for property, with first-time buyers particularly active, we could see a 5%-10% fall in house prices over the course of the next year.”
“The primary reason for the downward pressure on prices will be mortgage companies lending less due to the sharply rising cost of living and displaying broader caution amid the deteriorating economic climate. House prices will have to come down to meet those lower lending limits. It’s as simple as that.”
“I do not see the immense property crash happening that some are predicting as the jobs market is still fairly robust for now and supply is limited. But with inflation now in double digits, prices will almost certainly come down during the turbulent twelve months ahead. But as ever with the housing market, sooner or later values will start to rise again.”