Halifax has released its house price index for May.
The latest index shows that average house prices rose 10.5% in the year to May – the slowest pace of growth for this index since January, but with average house prices now reaching a new record of £289,099. In London it’s £541,942.
The latest data shows that house prices have risen 74% in the past decade, equating to a staggering £123, 016. In London over the past ten years prices are up 84% – or £247,638.
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown commented:
“The balance of power between property buyers and sellers has started to shift, so we’ve seen price rises slow again in May. However, with so many pressures from all sides sapping their energy, buyers may be too weak to take advantage of this opportunity.
Sellers have had all the power in the relationship for almost two years, because so many buyers flooded into the market and discovered there was almost nothing for sale. It has pushed prices skywards as bidding wars erupted around the UK. There’s still very little for sale, which has kept prices rising, but the balance has started to shift.
Halifax has noted that property demand is down from this time last year. It’s one reason why the number of mortgage approvals dropped in April. Meanwhile, the number of sales being agreed and completed both fell in April.”
Director of Henry Dannell, Geoff Garrett, commented:
“A slower rate of house price growth is always likely to follow a reduction in buyer demand and that’s certainly what we’re now seeing following a dip in mortgage approval activity at the start of the year. Buyers are acting with more caution with regard to the sums they are willing to borrow and, at the same time, lenders are reducing their range of products and increasing the rates they are prepared to offer. However, it remains to be seen as to whether this more tentative approach will reverse upward house price trends completely, as insufficient stock remains an issue in the current market.”
Director of Benham and Reeves, Marc von Grundherr, commented:
“The fact that the annual rate of growth continues to breach double figures is quite astonishing. Although a slow in the rate of monthly house price growth may indicate an air of lethargy is starting to creep in following such a consistent run of upward growth, the market remains in very fine form. With market stock at a scarcity, it looks as though this upward trend is unlikely to subside any time soon, despite ongoing pressure in the form of the escalating cost of living and the threat of a further interest rate increase.”
Meanwhile, Twenty7Tec has issued its findings based on its mortgage platform data for May 2022 which includes a drop in the total number of products available for a second consecutive month. Figures also show that by the end of May, 5% of all mortgage products had been removed in just a six-week timeframe. May was the first month that ended with fewer than 1,000 95% products since November 2021.
Nathan Reilly, Director of Lender Relationships at Twenty7Tec said of the findings:
“This year to date, we’ve seen a large uplift in the average number of mortgage searches being run by each adviser compared to the same period last year which also included the stamp duty deadline. We’re helping advisers become more efficient so that they can handle this extra demand, including using the APPLY system which removes a lot of the duplication of effort that advisers and homebuyers can otherwise experience.
June 2022 is going to be an incredibly interesting month for product availability after two consecutive months of product volumes dropping. That statistic is often a bellwether for mortgage market confidence.”
