10 Jun 2022
Average house prices in the UK hit a record high last month, increasing for the 11th straight month, according to data from Halifax. That said, there was a slowdown to the annual growth rate in a signal the market is starting to cool due to the cost-of-living crisis. Between April and May, house prices in Britain rose by 1% - £2,857. This brings the average price of a home in the UK to an all-time high of £289,099. Although annual house price growth still stands at 10.5%, this is the slowest growth rate since the beginning of the year. The Halifax findings reveal house prices have continued to rise, despite pressures from the cost-of-living and mounting food and energy bills, as demand for homes continues to exceed supply. In contrast, mortgage activity has slowed down, which is forecast to result in a reduction in housing market activity, reports The Guardian.
The inflation effect
Managing director of Halifax, Russell Galley, said recent property price inflation differed depending on the type of property. “Compared with May last year, you’d need about £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,” he said. “There is perhaps one green shoot for prospective purchasers; with overall buying demand down compared with last year, we may be past the peak sellers’ market.” Indeed, house price inflation has been stronger in certain regions of the country. Property prices surged during the pandemic-driven boom as buyers got involved with the so-called ‘race for space’.
Inflation by area
At the top of the pile for annual house price inflation in May was Northern Ireland, with prices increasing by 15.2% over the last year. This takes average prices to £185,000. In second place was the south-west of England, with an annual growth rate of 14.5% to take the average price to over £305,000. Elsewhere, in Wales, prices rose to an all-time high of more than £216,000 following a 13.7% rise over the last 12 months.