UK house prices increased by 7.8% in the year to June 2022, down from 12.8% in May 2022. On a non-seasonally adjusted basis, average house prices in the UK increased by 1.0% between May and June 2022, down from an increase of 5.7% during the same period a year earlier (May and June 2021).
House price growth was strongest in the East of England where prices increased by 9.7% in the year to June 2022. The lowest annual growth was in North East, where prices increased by 3.6% in the year to June 2022.
The Royal Institution of Chartered Surveyors’ (RICS’) June 2022 UK Residential Market Survey reported that results point to a softening in demand at the headline level.
The Bank of England’s Agents summary of business conditions 2022 Q2 reported a modest increase in the availability of properties for sale across the UK and house price inflation starting to moderate in some areas.
The UK Property Transactions Statistics showed that in June 2022, on a seasonally adjusted basis, the estimated number of transactions of residential properties with a value of £40,000 or greater was 95,420. This is 54.3% lower than a year ago (June 2021). Between May and June 2022, UK transactions decreased by 7.9% on a seasonally adjusted basis.
The Bank of England’s Money and Credit June 2022 release reported that mortgage approvals for house purchases, an indicator of future borrowing, decreased to 63,700 in June 2022, from 65,700 in May 2022. This remains below the pre-pandemic 12-month average up to February 2020 of 66,700.
Managing Director of Barrows and Forrester, James Forrester, commented:
“While both the monthly and annual rate of house price growth may have slowed quite considerably, the property market continues to march forward in fine form despite the fact that the rest of the economy is crumbling.
Of course, many will be quick to flag a reduced rate of growth as a sign that a market crash may be looming, but this amounts to little more than premature waffle and it’s important that we view a slower rate of growth in context with the period of unprecedented boom we’ve just experienced.
House prices are still up on a monthly and annual basis and given the instability of the wider backdrop right now, this is proof, if it was ever needed, that property is the safest investment you can make.”
Director of Benham and Reeves, Marc von Grundherr, commented:
“The UK economy is sailing head on into some very stormy seas at present, all while the captain remains on shore leave with no replacement yet to take the helm.
But despite this, the boat is yet to rock where the property market is concerned and the economic woes of rising inflation, increasing interest rates, and a cost of living crisis continue to bounce off the hull like mere pebbles rather than unforeseen ice bergs.
It’s inevitable that the property market was eventually going to slow from the high rate of knots it’s been moving at throughout the pandemic, but we’re yet to see any signs of it sinking and this is likely to remain the case.”
Managing Director of House Buyer Bureau, Chris Hodgkinson, commented:
“It very much looks like a matter of when, rather than if, with regard to the UK entering a period of recession and this will further fuel the economic angst that is currently gripping the nation.
While the property market has stood firm so far, we can expect a far greater level of uncertainty, coupled with hesitations on both the side of buyers and sellers, to cultivate a much less settled outlook over the coming months.
For those that do press on with a purchase, the ability to borrow will come at a greater cost and this will impact the price they are willing to pay, which in turn, will force sellers to lower their expectations when it comes to pricing their home for sale.”
Founding Director of Revolution Brokers, Almas Uddin, commented:
“It’s a very real possibility that interest rates will rise to between three and four per cent in an attempt to curb the 40 year high in inflation we’re currently seeing.
Although this will still be a historically low rate of interest, it will no doubt startle a generation of homebuyers who have known nothing other than a sub one per cent base rate until recently.
The result of which is likely to be a reduction in buyer demand and a more modest approach to borrowing, with these factors causing the previously high rates of house price growth seen over the last few years to plateau further.”
