House prices move higher in July
2nd August 2022 08:00
by Myron Jobson from interactive investor
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House prices are showing signs of slowing down - but not nearly as much as buyers would like.
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “Runaway house prices are showing signs of slowing down - but not nearly as much as buyers would like. UK home prices ran hot again in July, notching another month of double-digit year-over-year gains, up 11% from 10.7% in June. The average house price grew by a modest 0.1% on the previous month, after taking account of seasonal effects, and has now risen for the 12th consecutive month.
“Prices have remained stubbornly high during the summer months, which is typically a slow period for house sales because people are busy on holidays and generally preoccupied. While offer situations may not have been as competitive as they were in the spring months, many buyers hoping to snap up a property on the cheap during the quieter period in the housing market have been left disappointed.
“First-time buyers continue to have a rough time. Both home prices and mortgage rates have risen, while soaring inflation is eating into disposable incomes, making it harder to save for a deposit. Fast-rising rents are not offering any relief and could keep some wannabe homeowners in the hunt for a home for longer than they would like.
“Property prices continue to defy expectation, but it is surely a matter of time before the growing affordability hurdle stops the runaway housing market in its tracks. While the supply demand mismatch continues to prop up house prices, supported by strong labour market conditions, a culmination of inflated house prices, higher mortgage rates are likely to exert a cooling effect on the sizzling housing market.”
Key points:
- Annual UK house price growth increased slightly in July to 11.0%, from 10.7% in June
- Prices up 0.1% month-on-month after taking account of seasonal effects
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