UK house prices hit average of £294,845 in largest growth spurt since 2004
House prices leaped in June in the largest increase of monthly growth since 2004, hitting an average of £294,845 after months of declining growth.
Climbing ever-closer to the £300,000 mark, house prices jumped 1.8 per cent in June, after climbing one per cent in May, when the average cost of a home was £289,099, according to the Halifax House Price Index.
“House prices have now risen every month over the last year,” Halifax managing director, Russell Galley, said. “The supply-demand imbalance continues to be the reason house prices are rising so sharply.”
Onlookers are torn as to how the cost of living crisis, alongside the war in Ukraine and rising interest rates, will impact the market.
Imogen Sporle, head of term finance at London-based broker Finanze seems to think that soon, the only direction of prices will be southbound.
“Despite this extraordinary data, it’s not a case of if house prices crash but when. Whether the full crash happens this year or next, it’s coming,” she said.
“Inflation is the property market’s nemesis and is hitting sentiment for six. Lenders becoming more conservative with affordability is sensible in the current climate but of course this will mean people can borrow less, which means sellers may soon have to price lower… There are tough times ahead.”
However, boss of estate agency Chestertons, Richard Davies, assured that London’s property market will keep its appeal, but that a lack of stock will stoke competition.
“We predict the micro markets of central London to become particularly competitive,” he said, adding that some of the firm’s offices in the city are noticing a “gradual return of buy-to-let investors who are lured back into the market by rising rents and the potential of higher profits.”
Founder of London-based Altura Mortgage Finance added: “It’s a brave person who bets against the UK property market.
“There’s every chance house prices will shrug off war in Europe and the cost of living crisis, albeit with more modest growth, especially as property has always been a good inflation hedge.”