UK house price skyrockets to record £289k: ‘Any mutterings of a market crash are greatly exaggerated’
The average UK house price hit a record high of £289,099 in May, but the pace of growth in values is slowing, according to an index this morning.
Russell Galley, managing director of Halifax, said: “The average cost of buying a home in the UK is up 1 per cent, or £2,857, on last month, and has now risen for 11 consecutive months.
“Annual growth also remains in double-digits, at 10.5%, although this is the slowest rate of growth seen since the start of the year.”
Responding to today’s news, Director of Henry Dannell, Geoff Garrett, said: “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.”
He added: “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.”
Garrett noted, however, that “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.”
Meanwhile, the 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.”
Marc von Grundherr
“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.”
James Forrester, Managing Director of Barrows and Forrester, also discussed today’s data with Morning Wire
“Any mutterings of a property market crash have been greatly exaggerated and the UK property market has remained impervious to the dark clouds that have been gathering over the wider economy in recent months,” he said.
“While many will be struggling with the increased cost of living, the hard task of saving is nothing new for the nation’s aspirational homebuyers who continue to swamp the market while the cost of borrowing remains very favourable.”
Finally, Christina Melling, CEO of Stipendium, pointed out that “it’s certainly a tough time if you’re a first-time buyer. Not only has the initial financial hurdle of buying grown immensely in the last decade, but the gaps between each rung of the property ladder have also become much further apart.”
She added: “As a result, not only is it taking until far later in life to realise our dreams of homeownership, but the climb has become much harder and longer, even once we’ve secured that first foot.”