House prices broke a new record, but growth is expected to slow

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The average UK house price rose by more than £ 3,000 in April, the longest monthly increase since 2016, according to an index.

Halifax said the average property value rose 1.1% or £ 3,078 last month.

Russell Galley, CEO of Halifax, said: “This was the 10th month in a row that property values ​​have risen, the longest run with continuous gains since the end of 2016.”

The typical house price was a new record of £ 286,079 – an annual increase of 10.8%.

With the current growth rate, the price of a typical home could hit £ 300,000 by the end of the year, but Halifax said it remains unlikely given the predicted economic conditions.

Prices have risen by an average of £ 47,568 over the last two years, the report said.

It took the previous five and a half years to take a similar leap, with values ​​rising by £ 47,689 on average between October 2014 and April 2020.

Galley said: “The imbalance between supply and demand continues, with an insufficient number of new properties entering the market to meet the needs of potential buyers and strong competition to secure properties that drive up prices.

“There are still signs that this demand is centered on larger family homes rather than smaller properties such as apartments. In the past year, the prices of detached and double properties have risen by more than 12% against just 7.1% for apartments.

“The net cash increase for detached properties, at just under £ 50,000 over the past year, is almost five times more than for flats.”

House prices have continued to rise despite the fact that the cost of living crisis has put economic pressure on households.

With interest rates rising and inflation further pushing up household budgets, house price growth is still likely to slow at the end of this year

Inflation is expected to hit 10% plus in the coming months, and the Bank of England raised the base rate to 1% this week, pushing up costs for some borrowers.

Sir. Galley continued: “The headwinds facing the wider economy cannot be ignored.

“House-to-income ratios are already at their highest level ever (typically 7.2 times full-time average earnings), and with rising interest rates and inflation further pushing up household budgets, house price growth is still likely to slow by the end. of this year. “

Across the UK, Halifax said Northern Ireland is the strongest priest for annual house price growth of 14.9%, although the average house price there is still well below the £ 230,931 record set in the summer of 2007.

Average house prices in Wales and Scotland broke new records in April by £ 214,396 and £ 196,471 respectively.

Six out of nine English regions recorded double-digit annual inflation in house prices in April.

In the Southwest, the average house price broke through the 300,000-pound barrier for the first time, to 301,632 pounds.

Annual inflation in London house prices continues to lag behind the rest of the UK by 6.2%.

But the average property value in London remains much higher than the rest of the UK, with the latest average price of £ 537,896, which is also a new record for the city, Halifax said.

The housing price boom is soon over

Nathan Emerson, CEO of real estate professionals’ body Propertymark, said: “Our latest housing market report records an increase in new potential registered buyers per member real estate department to 84 in March, however with the latest announcement from the Bank of England d. show a certain effect on the market in the coming months. ”

Andrew Montlake, CEO of mortgage broker Coreco, said: “Although prices rose sharply again in April, the house price boom will soon be over.

“The stamp duty holiday, record low interest rates and the race for space triggered an unprecedented rise in demand and activity, pushing prices ever higher, but we are now heading into the business end of the pandemic.”

Mark Harris, CEO of mortgage broker SPF Private Clients, said: “With another rate hike this month, and the potential for more to come, brokers are being kept busy.

“Borrowers are increasingly concerned about rising mortgage rates and are eager to secure a fixed rate before rising further.”

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “Last month we asked people how much their monthly mortgage repayments would have to increase this year to put their finances under pressure, and 10% of people said up to £ 50. would be enough.

“When the increases started to close in at £ 100 a month, a third of people said they would face difficulties, and with an increase of up to £ 200 a month, two thirds said they would struggle. Unfortunately, increases of this size are possible. “

Here are the average house prices in April followed by the annual increase, according to Halifax:

– East Midlands, £ 237,466, 12,8% – East of England, £ 334,570, 11,9% – London, £ 537,896, 6,2% – North East, £ 163,431, 8,9% – North West, £ 217,199, £ 217.199, 10.7% –55 £, 14.9% – Scotland, £ 196.471, 8.3% – South East, £ 390.095, 12.1% – South West, £ 301.632, 14.8% – Wales, £ 214.396, 14, 2% – West Midlands, £ 241,632, £ 241,632. Humber, £ 197,955, 10.3%

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