Average UK house price hits record of £289,099 but market starts to cool
06-16-2022
Average UK house price hits record of £289,099 but market starts to cool
Annual growth remains at 10.5%, the slowest rate since start of year, says Halifax
Cottages in Exeter, Devon
Halifax says mortgage activity has started to slow in the UK. Photograph: Lee Pengelly/Alamy
Joanna Partridge
The average UK house price hit a fresh high in May, rising for the 11th month in a row, according to Halifax data, but the annual growth rate slowed in a sign that the cost of living crisis is cooling the market.
House prices increased by 1% between April and May, or £2,857, taking the average price of a home to a record of £289,099.
While annual house price growth remains at the elevated level of 10.5%, this is the slowest rate of growth seen since the start of the year.
Halifax said house prices had continued to climb despite cost of living pressures and rising food and energy bills because demand for homes continued to outstrip supply.
However, mortgage activity has started to slow, according to Halifax – part of Lloyds Banking Group, the country’s biggest mortgage lender – which is expected to reduce housing market activity.
Russell Galley, the managing director of Halifax, said recent property price inflation had been felt differently by house hunters, depending on the type of home they were looking to buy.
“Compared with May last year, you’d need about £10,000 more to buy a flat, but an additional £50,000 for a detached home. This clearly creates a knock-on effect for those looking to make their first home move, as the rungs on the housing ladder have become increasingly wider,” he said.
“There is perhaps one green shoot for prospective purchasers; with overall buying demand down compared with last year, we may be past the peak sellers’ market.”
House price inflation has been felt more strongly in certain regions of the UK, with property prices soaring during the pandemic-fuelled housing boom as buyers joined the “race for space”. Urban residents sought out larger and more rural properties as flexible and remote working took hold.
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Northern Ireland topped the table for annual house price inflation once again in May, after prices there rose by 15.2% over the past 12 months, taking average prices above £185,000. This was followed by the south-west of England, which recorded an annual growth rate of 14.5%, taking the average price of a home in the region above £305,000. Meanwhile, average house prices in Wales have risen to a record level above £216,000 after a 13.7% increase over the past year.
The latest price rises come after a decade of steady climbs in which house prices have increased by 74%, or by £123,016.
The strongest house price inflation has been in London, and house hunters in the capital will need £247,638 more than those who were looking for a property 10 years ago.