New research has revealed that property prices are showing remarkable resilience despite the economic uncertainty caused by the cost-of-living crisis and the predictions that interest rates will continue to rise in the coming months.
The latest Halifax House Price Index shows that across the UK property prices have increased by +0.4 per cent in August following the slight drop of -0.1 per cent reported in July.
The index has also revealed that the annual rate of growth eased slightly dropping from +11.8 per cent last month to +11.5 this.
According to the research, a typical UK property now costs a record £294,260 – this is up over £30,000 since last August.
Property Prices in the Nations and Regions
According to the research, Wales topped this month’s top table for annual house price growth, with prices up by £31,246 (+16.1%) to £224,858, which is the strongest level of growth the nation has seen since early 2005.
By contrast, Scotland saw a slight slowdown from +9.5 per cent last month to +9.4 per cent this. Despite this fall, the average cost of a Scottish property rose to a record high of £204,362.
The rate of annual growth in Northern Ireland also eased back to +12.5 per cent last month, with a typical home now costing £185,505.
The region of the UK showing the strongest rate of growth was the South West with annual growth up by +14.5 per cent and an average property costing £313,003.
Although property price growth in London was lower than the other regions rising only 8.8 per cent, this was still its highest level in over six years with a typical property costing a record £554,718 (a £44,669 increase over the last 12 months)
Industry Comment
The report was published before Liz Truss’ new Government stepped in to set the energy price cap at a hugely reduced level compared to the predicted 80 per cent rise, meaning Kim Kinnaird, Director, of Halifax Mortgages, comments on the cost-of-living pressures do not take these relief measures into account. She commented: “While house prices have so far proved to be resilient in the face of growing economic uncertainty, industry surveys point towards cooling expectations across the majority of UK regions, as buyer demand eases, and other forward-looking indicators also imply a likely slowdown in market activity.”
Adding: “Borrowing costs are also likely to continue to rise, as the Bank of England is widely expected to continue raising interest rates into next year.”
The view of James Forrester, Managing Director of Barrows and Forrester, was more optimistic: “Every time we think the housing market is starting to wobble, it rebounds to reach yet another record high, defying the economic angst that has engulfed the nation in other areas of our day to day lives.”
Now the energy cap has been announced improving overall affordability for buyers, do you think house prices will continue to rise? Or do you think future interest rate rises will cause a slowdown in the UK’s still very warm market?
