Yahoo Finance UK average house prices jump 11% in a year to £271,209
Annual house price growth in the UK accelerated to 11% in July despite the cost of living crisis, with a house costing on average £271,209 last month.
House prices increased by 0.1% month-on-month – the 12th consecutive monthly increase, according to Nationwide Building Society.
The increase took the average house price to £271,209, some £55,000 above the level in February 2020, before the COVID pandemic.
However, the impact of inflation running at a 40-year high of 9.4% and record low consumer confidence wa highlighted by a cooling of mortgage transactions managed by Nationwide.
“The housing market has retained a surprising degree of momentum given the mounting pressures on household budgets from high inflation, which has already driven consumer confidence to all-time lows,” Nationwide chief economist Robert Gardner said.
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“While there are tentative signs of a slowdown in activity, with a dip in the number of mortgage approvals for house purchases in June, this has yet to feed through to price growth.”
Total housing market transactions in the three months to May were about 20% below the elevated levels resulting from the stamp duty holiday, Nationwide reported.
Marc von Grundherr, director of London estate agent Benham and Reeves, said: "You'd have thought that having gorged themselves on a feast of mortgage affordability and stamp duty reductions during the pandemic, the appetite of the nation's homebuyers would be dwindling.
"This clearly isn't the case and even a string of consecutive interest rate hikes are yet to taint their taste buds as they continue to pile their plates high – pushing house prices to record highs in the process.
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “The housing market remains robust posting its 12th successive monthly increase – an extraordinary feat in the face of the biggest cost of living crisis in living memory.
"High employment and a limited number of homes on sale have supported market growth with activity strong across all buyer types.
“The prospect of further interest rate increases on the horizon may also make people think twice about whether they can afford to move home.
Alice Haine, personal finance analyst at Bestinvest, said that, with a further Bank of England base rate hike expected later this week, “this should have a dampening effect on the market”.
Read more: Mortgages: Buyers free to borrow more as Bank of England scraps affordability test
She continued: “Add in the barrage of challenges to come – from the surge in energy prices in October, when the energy watchdog increases the cap on bills, to runaway inflation continuing to outstrip wage growth – and the pressure on household finances will only intensify, potentially placing even more pressure on the property sector.”
Tom Bill, head of UK residential research at Knight Frank, said: “For those wondering how house prices can continue to grow as the cost-of-living squeeze intensifies, the answer is that they are happening for the same reason – a supply chain disruption.”
Nathan Emerson, chief executive of Propertymark, which represents estate and letting agents, said: “The market has been relentless for the past two years. Our member agents are telling us that they are now beginning to see the signs of a return to a normal seasonal trend when the market slows down in the summer months.
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