The average house price now sits at £292,000 in the UK, £39,000 higher than this time last year, according to the latest monthly house price index released today (September 14) by the Office for National Statistics.
Prices are up £6,000 between June and July of this year, compared with a fall of £13,000 between the same months last year.
The figures showed that prices have readjusted following the fall witnessed this time last year when the stamp duty holiday came to an end, with house prices up 15.5 per cent over the year to July.
Experts said the increase highlighted how the stamp duty holiday bolstered the housing market after losing pace during the pandemic, rather than indicating where prices are headed next.
“The window for cheap mortgages is rapidly closing, with rates returning to levels we haven’t seen in a while,’ Interactive Investor’s senior personal finance analyst, Myron Jobson said.
“Mortgage affordability is becoming a growing thorn in prospective buyers’ side. Prospective homebuyers’ attempts to stretch their budgets to purchase a property are increasingly being thwarted by the cost-of-living crisis, with inflation hitting 9.9 per cent.
“Many first-time buyers will have little option but to give up on their dream of homeownership for the time being,” Jobson said, adding that affordability considerations are likely to act as a brake on large house price rises.
In Jobson’s view, a slowdown rather than a crash seems more likely due to the imbalance between supply and demand for homes.
Likewise, Knight Frank’s head of UK residential research, Tom Bill does not expect house prices to fall anytime soon, but said we can expect to see the double-digit price growth witnessed over the past two years curbed as a result of rising mortgage rates.
Referring to the impact the government’s energy support package will have, Bill said: “The government is effectively in pre-election mode and further tax cuts will benefit the housing market in the short-term. The risk is that fiscal largesse today means rates will eventually need to rise faster.”
Regional growth
Northern Ireland remains the cheapest UK country to buy a property, with the average house price at £169,000 - an increase of 9.6 per cent over the year to quarter two.
Wales saw the biggest increase in prices over the year to July, up 17.6 per cent up from an increase of 9.1 per cent in the year to June 2022.
The average house price in Wales now sits at a record level of £220,000.
Likewise, prices in Scotland now sit at a record level of £193,000. Prices in Scotland increased by 9.9 per cent over the year to July, down from an increase of 11.4 per cent in the year to June 2022.
In England, house prices also sit at a record high, up 16.4 per cent over the year to £312,000. This is up from 7.3 per cent in the year to June.
jane.matthews@ft.com
