The Halifax House Price Index (HPI) was released on the 7th September showing the market activity for the month of August. This showed house prices had increased by 0.4% in August compared to July and now stand a record £294,260.
This also showed house prices are 11.5% higher than this time last year, however, this was a slower rate of increase than the July Halifax HPI which showed 11.8% increase.
Wales is showing the fastest rate of growth in the UK for house price inflation which is up by 16.1%, which is the strongest level of growth since 2005.
These findings correlate with the recent Nationwide HPI which also showed, despite a recent slump, the housing market refusing to die down.
The director of Halifax mortgages, Kim Kinnaird, commented on the findings that there were “cooling expectations” across the sector. She added:
“Firstly, there is the considerable hit to people’s incomes from the cost-of-living squeeze. The 80% rise in the energy price cap for October will put more pressure on household finances, as will the further increases expected for January and April.
At the levels being predicted, this is likely to constrain the amounts that prospective homebuyers can afford to borrow, on top of the adverse impact of higher energy prices on the wider economy.
While government policy intervention may counter some of these impacts, borrowing costs are also likely to continue to rise, as the Bank of England is widely expected to continue raising interest rates into next year.”
However, she added that these findings should be taken into context of the recent years of exceptional market activity. She stated:
“With house price to income affordability ratios already historically high, a more challenging period for house prices should be expected.
However, this should be viewed in the context of the exceptional growth witnessed in recent years, with average house prices having increased by more than £30,000 over the last 12 months alone.”
Nathan Emerson, CEO of Propertymark, also commented on the housing market activity. He stated:
“Pre-pandemic seasonal trends are re-emerging as a summer lull continues within the market. However, buyer confidence remains strong pushing up the average time to sell to record breaking levels at over four months.
“The wider economic climate and rising energy costs have meant that buyers are negotiating harder and more and more buyers each month are starting to secure homes under the asking price.
“The number of properties coming the market is fairly static and interest rates remain at a historically low level despite recent rises so we anticipate that house prices will continue to slow in growth month on month but won’t drop significantly before the end of the year.”
The full index can be seen here.
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