Halifax’s Housing Price Index (HPI), released today, confirmed record house prices, with monthly prices up 1.1% in April, marking it the 10th consecutive monthly rise in the longest run since 2016.
The index found that the average house price hit a new high of £286,079 with a 1.1% rise in April, however, Halifax mentioned that rising interest rates and tight household budgets will temper the market over the coming year.
The average property price is up 10.8% from April 2021, with homeowners benefiting from a nearly £50,000 increase in the value of their home over the last two years.
Northern Ireland has surpassed the south-west of England as the UK’s best performer in terms of house price increases, with an increase of 14.9% to £182,565. The average price of a home in the south-west increased by 14.8% to £301,632.
Wales grew 14.2% to an all-time high of £214,396, while Scotland grew at a slower rate of 8.3% to a new high of £196,471.
At 6.2%, Greater London continues to grow at the weakest pace. It does, however, have the most expensive residences in the UK, with an average price of £537,896.
According to Halifax, demand for larger family homes is outpacing demand for smaller properties like flats, with detached and semi-detached properties rising 12% annually compared to 7.1% for apartments.
The housing boom caused by the pandemic sent purchasers in a “race for space” as city dwellers sought for more rural properties when flexible and remote working became popular, and this will continue for the time being, according to Halifax.
Russell Galley, Managing Director of Halifax, said, “For now, at least, despite the current economic uncertainty, the strong increases we’ve seen in house prices show little sign of abating.”
“Housing transactions and mortgage approvals remain above pre-pandemic levels, and the continued growth in new buyer inquiries suggests activity will remain heightened in the short-term.”
“The imbalance between supply and demand persists, with an insufficient number of new properties coming on to the market to meet the needs of prospective buyers and strong competition to secure properties driving up prices.”
According to Halifax’s monthly housing index, the rate of growth is slowing, with April falling short of the 1.4% gain in March and the 11.1% annual rate in the same month.
The Bank of England hiked interest rates from 0.75 percent to 1% on Thursday to combat rising inflation, which is anticipated to hit 10% this year, the highest level since 1982, as household heating costs are expected to climb again in October.
Halifax assumes that the rising cost of living for UK consumers will impact the housing market leading to a slow down in growth.
Walid Koudmani, Chief Market Analyst at financial brokerage XTB commented, “The latest Halifax HPI pointed to another sharp increase in UK house prices with the tenth consecutive monthly rise, the longest run since 2016.”
“However, while this is a concerning situation, the rate of house price growth is expected to slow later this year as incomes fail to keep up in a climate of record inflation and general cost increases. Until that point, we could be seeing a continuation of this trend which has led house prices to reach historic levels.”