UK property prices rise at the fastest rate for 18 years
House prices in the UK rose at the fastest annual rate in 18 years last month, as demand – especially for larger homes – continued to outstrip the number of properties on the market.
Halifax, one of the country’s biggest mortgage lenders and part of Lloyds Banking Group, said the market “defied any expectations of a slowdown”, with prices rising year on year in June by 13%, the highest since late 2004. Prices rose 1.8% compared with May, which was the biggest monthly rise since early 2007.
A typical property now costs £294,845, another record high, as prices continue to rise despite the cost of living crisis. House prices have risen every month over the past year, and have climbed by 6.8% so far this year, or £18,849 in cash terms.
Russell Galley, managing director at Halifax, said: “The supply-demand imbalance continues to be the reason house prices are rising so sharply. Demand is still strong – though activity levels have slowed to be in line with pre-Covid averages – while the stock of available properties for sale remains extremely low.
“Property prices so far appear to have been largely insulated from the cost of living squeeze. This is partly because, right now, the rise in the cost of living is being felt most by people on lower incomes, who are typically less active in buying and selling houses. In contrast, higher earners are likely to be able to use extra funds saved during the pandemic.”
He said the housing market would not remain immune from the economic slowdown. But for now it was being supported by a “huge shift” in demand towards bigger properties, with average prices for detached houses rising by almost twice the rate of flats over the past year (13.9% versus 7.6%).
“In time, though increased pressure on
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