House Prices Hit a Record High

Average house price hits £294,845 in June

New data from the mortgage lender, Halifax, shows that house prices hit a record high in the month of June, even when the current cost-of-living crisis was expected to slow demand.

The average house price in England hit the staggering milestone of £294,845 in June - which was a 1.8% increase and the largest monthly rise since 2007.

People wanting larger and detached houses

Halifax suggested that both a shortage of housing stock and increased demand for larger and detached homes was behind the price rise.

This demand for larger and detached houses has seen these average property values increase by 13.9% over the last year compared to flats that have seen more modest increases of 7.6%.

The mortgage lender does expect the price growth to slow down and says that house prices have so far been largely untouched by the cost-of-living crisis.

The managing director of Halifax, Russell Galley, added: "Increased pressure on household budgets from inflation and higher interest rates should weigh more heavily on the housing market, given the impact, this has on affordability."

13% price increase this year so far

House prices have risen by 13% this year to the month of June – which is the highest annual increase since 2004.

Although this increase is astonishingly high, Northern Ireland has seen the largest increase with the average price up 15.4% in the 12 months to June 2022.

However, the average price of £187,833 in Northern Ireland remains much lower than in the rest of the UK.

The Bank of England has been forced to increase interest rates

This all comes at a time when the Bank of England has been forced to increase interest rates to attempt to curb soaring inflation – in turn causing mortgage rates to rise for those borrowing.

Mr Galley says: "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.”

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