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Data showed that the average price paid for a home in England and Wales increased by £2,870 to £372,175, which equates to an increase of 0.8% compared to the average price paid in May.
The increase sets a new record level for England and Wales for the eighth time in the last nine months, underlining the recent strength of the market.
From the start of the pandemic in March 2020 to the end of May 2022, house prices have increased by £53,430, representing a 16.9% rise. This contrasts with the increase in the consumer price index with housing costs of 10.2% over the same period.
The average house price in England and Wales has continued to increase throughout the first six months of this year on an almost straight-line basis.
While market commentary had predicted a slowing growth rate, house prices throughout large areas of England and Wales have continued to climb so far this year.
The percentage change in annual house prices on a regional basis in England, and for Wales, averaged over the three-month period of April to June 2022, compared to the same three months the previous year.
All ten Government Offices for the Regions (GOR) regions in England and Wales experienced rising prices over the last twelve months, with nine of the ten reaching new record average house prices in May.
The one exception was the North East, where prices in Tyne and Wear and County Durham – the two largest conurbations in the region in terms of house sales – fell by -0.9% and -2.7% respectively in the month.
Wales remains the GOR area with the highest annual growth rate, a position it has now held for eleven months, and with real terms increases in prices.
Meanwhile, 21 of the 22 local authority areas in Wales have seen prices rise over the period, the one exception being Denbighshire.
Greater London positions itself in second place, where prices over the twelve months have risen by 10.2%.
Price growth in London has been the lowest of all the 10 areas since the start of the pandemic, as purchasers looked to move out of the capital into the more open countryside of the South East and beyond.
However, from March 2022 onward, data shows that some buyers were moving back into central London to take advantage of the lull in prices, as offices in the capital started to re-open.
Four of the ten GOR areas have seen an increase in their annual rates of growth, compared to the previous month.
The GOR area with the largest increase in its growth rate is Greater London, up from 8.5% last month, to 10.2% this month.
The two areas with the largest falls are the North East and the North West, both witnessing a decline of 2.0% from the rates experienced last month.
Housing market throughout the summer
While the predicted slowing in the market has yet to take place, e.surv says “we must remain cautious”.
It says the monthly data has shown some slowing from the early part of 2022 and that is in nominal prices.
Given near double-digit inflation, e.surv explains that house prices have “just about kept pace with that, though are well in excess of wage inflation”.
Mortgage rates have been rising, so pressures on some households may be intensifying, it notes. Meanwhile, it says the picture on transactions is “also less than clear”, given the processing backlog.
The Land Registry data suggests volumes in England and Wales are down compared to previous years, but HMRC’s own estimate for May 2022 is that there were 89,720 sales in the month compared to 84,780 in May 2019.
Commenting on the latest data, e.surv director Richard Sexton says: “All ten of the regions in our survey have experienced rising prices over the last twelve months, with nine of the ten setting new record average house prices in May 2022.”
“Wales remains the strongest performing region – with the highest annual growth rate, a position it has now held for eleven months, and with real terms increases in prices. The return to work has seen a change in the fortunes of the South East, with Greater London now taking second place as prices over the twelve months have risen by 10.2%.”
“What is clear in our data is that house price growth remains resilient notwithstanding the pressures in the broader economy. This is possibly because the squeeze on the cost-of-living is not yet being absorbed equally across society.”
“Homeowners, for now, are relatively unscathed. Indeed, arrears figures remain at historic lows. Housing, as an asset group, continues to outperform other classes and so remains attractive to investors – particularly good quality properties.”
“As ever a lack of supply of desirable stock and strong employment in the UK economy continues to support price growth,” Sexton adds.