House price growth hits 19 year high as market turbulence continues
The latest UK house price index shows the market remains rather unpredictable as the average house price increased by 15.5% over the year to July 2022, a huge jump on the 7.8% increase seen in June 2022. This is the highest UK annual inflation rate since May 2003. While this increase appears stark at first glance, it is worth noting the jump was largely as a result of the fall in prices seen this time last year due to changes to the stamp duty holiday. Even still, the average UK house price now sits at £292,000 – a whopping £39,000 higher than this time last year.
“The housing market has so far remined resilient despite the ongoing cost-of-living crisis. While the latest UK inflation data released this morning showed a slight fall to 9.9% last month, a higher peak is still expected to materialise over the coming months and as such the Bank of England is expected to continue hiking interest rates and the current resilience may well falter as a result.
“Coupled with rising interest rates, soaring energy prices will also make buyers more cautious. While Prime Minister Liz Truss has now introduced a £2,500 cap on energy prices, many will still feel the squeeze financially and this could put a halt on people’s plans to move home.
“Whether these ongoing issues translate into a fall in house prices will not be seen for some time yet, though this may well be the case if the winter proves to be as difficult as predicted.