More buyers than properties continues to play a big part in the reason why the housing market remains healthy.

The property market remains strong, as house prices rose by 1.8% in June according to Halifax. The lender says this is the twelfth consecutive monthly rise. Annual house price growth has risen by 13% and is the highest level since late 2004.

‘The UK housing market defied any expectations of a slowdown, with average property prices up 1.8% in June, the biggest monthly rise since early 2007,’ says Russell Galley, Managing Director of Halifax. ‘This means house prices have now risen every month over the last year and are up by 6.8% or £18,849 in cash terms so far in 2022, pushing the typical UK house price to another record high of £294,845.’

Supply and demand

Halifax says that the imbalance between supply and demand is responsible for the price rises. Galley adds that demand is ‘still strong’ even though activity levels have slowed. The current levels of stock available remains low.

‘Property prices so far appear to have been largely insulated from the cost of living squeeze,’ says Galley. ‘This is partly because, right now, the rise in the cost of living is being felt most by people on lower incomes, who are typically less active in buying and selling houses. In contrast, higher earners are likely to be able to use extra funds saved during the pandemic, with latest industry data showing that mortgage lending has increased by the highest amount since last September.’

This doesn’t mean that the housing market will remain immune to the current economic challenges we’re facing in the UK. ‘But for now, it continues to demonstrate – as it has done over the last couple of years – the unique combination of factors impacting prices,’ adds Galley. ‘One of these remains the huge shift in demand towards bigger properties, with average prices for detached houses rising by almost twice the rate of flats over the past year (+13.9% vs +7.6%).’

Regions seeing the biggest house price rises

Northern Ireland topped the table for annual house price inflation, up by 15.2%, equating to an average property price of £187,833.

Wales also continues to record a strong rate of annual growth, up by 14.3%, with an average property cost of £219,281.

The South West saw the highest annual house price growth of any region in England, at 14.2%, where a typical home now costs £308,128.  

Prices in the capital

London continues to fall behind other regions in terms of annual house price inflation (with prices up by 7.1%), though with an average property price of £547,031 it remains by far the most expensive place in the UK to buy a home. That said, London is expected to recover after the pandemic with estate agents Savills predicting that property in prime central postcodes will grow in value by 8% this year and almost 24% over the next five years.

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