Annual house price growth remains in double figures with eleventh monthly rise: Halifax

House prices increased by 1.0% in May, the eleventh consecutive monthly rise, according to the latest Halifax house price index.

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Rozi Jones
8th June 2022
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"Mortgage activity has started to come down and, coupled with the inflationary pressures currently exerted on household budgets, it’s likely activity will start to slow."

As a result, house prices are at a new record high of £289,099.

Annual growth remains in double digits, at 10.5%, however the pace of annual growth is edging down from the highs seen earlier in the year.

Northern Ireland topped the table again this month for annual house price inflation, seeing prices rise by 15.2%, equating to an average of £185,386.

The South West of England also recorded a strong rate of annual growth at 14.5%, with an average property cost of £305,173, alongside Wales at 13.7%, where a home is now a record of £216,120.

Overall, nine regions of the UK registered double-digit annual inflation, with only Yorkshire and the Humber, Scotland and London in single figures.

In Scotland, growth continues to underperform relative to the UK average, with annual inflation at 8.3%. A home in the country now costs an average £198,288.

Russell Galley, managing director of Halifax, said: “The average cost of buying a home in the UK is up 1%, or £2,857, on last month, and has now risen for eleven consecutive months. Annual growth also remains in double-digits, at 10.5%, although this is the slowest rate of growth seen since the start of the year.

“The average cost to buy a home in the UK is now £289,099, hitting yet another record high. Despite the very real cost of living pressures some people are experiencing, the imbalance between supply and demand for properties remains the primary reason driving the continued climb in house prices.

“For house hunters, the extent of the impact of property price inflation continues to be linked to the type of home they are looking to buy. Compared to May last year, you’d need around £10,000 more to buy a flat, but an additional £50,000 for a detached home. This clearly creates a knock-on effect for those looking to make their first home move, as the rungs on the housing ladder have become increasingly wider.

“However, the housing market has begun to show signs of cooling. Mortgage activity has started to come down and, coupled with the inflationary pressures currently exerted on household budgets, it’s likely activity will start to slow.

“So, there is perhaps one green shoot for prospective purchasers; with overall buying demand down compared to last year, we may be past the peak sellers’ market.”

Tomer Aboody, director of MT Finance, commented: "Remarkably, we are coming up to a year of month-on-month growth in house prices, fuelled by eager buyers looking for more space, while taking advantage of the low interest rate environment.

"However, with prices rising by 74 per cent in the past decade, it shows just how much the market is running away from first-time buyers. With many years of record low interest rates, buyers have been unwittingly pushing up prices due to lack of supply, taking on bigger mortgages to afford more expensive homes.

"As rates are going up along with inflation, a slowdown is being seen and buyers are less confidence about stretching themselves, especially when it comes to properties needing work. Rising costs of material and labour are putting end-users off, resulting in them paying a premium for ‘completed’ homes."

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