How long before cost-of-living crisis slows house price growth?
13th April 2022 11:06
by Myron Jobson from interactive investor
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interactive investor comments on the latest ONS UK House Price Index.
- UK average house prices increased by 10.9% over the year to February 2022, up from 10.2% in January 2022
- The average UK house price was £277,000 in February 2022, which is £27,000 higher than this time last year
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “House price growth continues to defy expectations - much to the frustration of many wannabe homeowners who find themselves priced out of the market.
“With inflation hitting its highest rate since 1992 in March, and set to balloon further in the coming months, the escalating cost-of-living crisis will surely have a cooling effect on the red-hot property market. Rising prices eats into disposable income, making it harder to save for a deposit, while the recent hikes in interest rates, and the likelihood of more, have driven up the cost of mortgages. Fast-rising rents exacerbates matters.
“Low housing inventory could also apply the brakes on runaway prices, as buyers wait for more stock to become available before making a move.
“The fact remains that the property ladder remains ever elusive for many first-time buyers - and with the ‘bank of mum and dad’ also facing its own cost-of-living challenges, many aspiring homeowners will struggle to realise their goal.”
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