UK house prices rise but cost of living crisis will cool market, says Halifax
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Loading... - Amelia McPherson
- 12 May 2022
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UK house prices rose again in April, extending the longest run of monthly increases in six years, according to Halifax, but the lender said rising interest rates and squeezed household budgets would cool the market over the next year.
The average cost of a home rose by 1.1% in April, the 10th consecutive monthly rise in the longest run since 2016, to a record high of £286,079.
The price of the average property is up 10.8% on the same month last year, with homeowners enjoying an almost £50,000 increase in the price of their property over the last two years.
Halifax said that the pandemic-fuelled housing boom, marked by buyers in a “race for space” as urban dwellers sought out more rural properties when flexible and remote working took hold, will continue for the time being.
“For now, at least, despite the current economic uncertainty, the strong increases we’ve seen in house prices show little sign of abating,” said Russell Galley, the managing director of Halifax.
“Housing transactions and mortgage approvals remain above pre-pandemic levels, and the continued growth in new buyer inquiries suggests activity will remain heightened in the short-term. The imbalance between supply and demand persists, with an insufficient number of new properties coming on to the market to meet the needs of prospective buyers and strong competition to secure properties driving up prices.”
However, the rate of growth is slowing, with April down on the 1.4% increase in March, and the 11.1% annual rate in the same month, according to Halifax’s monthly property index.
On Thursday, the Bank of England raised interest rates from 0.75% to 1% to tackle increasing inflation, which is expected to rise above 10% this year, the highest level since 1982, as home energy bills are expected to jump again in October. Read More…
