House prices in the UK have increased 12.8% in May on an annual basis, with the average property in the UK being valued at £283,496, according to the latest UK house price index data from HM Land Registry.
The data found that house prices in the UK have risen by 1.2% since April this year.
In England, house prices have risen on average by 1.3 % since April and 13.1% on an annual basis, taking the average property value to £302,278.
For London, house prices have risen by 0.2 % since April and have seen an annual price rise of 8.2 % taking the average property value to £526,183.
Wales house prices have risen on average by 0.9 % since April and have gone up by 14.1% on an annual basis, taking the average property value to £212,414.
On a regional basis, the South West experienced the greatest increase in its average property value over the last 12 months with a movement of 16.9 % the East Midlands saw the most significant monthly price fall with a movement of -0.5 %.
The North West saw the most significant monthly price fall with a movement of -0.2 % since April, while London saw the lowest annual price growth with an increase of 8.2%.
These figures are released after the Office for National Statistics (ONS) revealed this morning that inflation in the UK reached 9.4% in June, setting a fresh 40-year record high.
The latest figure is driven by a 42.3% rise in the price of motor fuels year-on-year and an increase of 9.8% in the price of food and non-alcoholic beverages.
Coreco managing director Andrew Montlake says the latest data “is not a true reflection of where the market is at right now. That was then and this is now”.
“Economic conditions have deteriorated significantly since May. The era of ultra-cheap money is over and that will soon start to feed through into house price growth. Increased borrowing costs and the immense pressure on household finances, as seen with inflation hitting 9.4%, will almost certainly start to temper demand in the months ahead, which will see the rate of price growth slow.”
“The one constant in these times of flux, of course, is the lack of supply and homes being built. The dearth of good quality, affordable housing for sale will support prices even as we go through an unprecedented cost of living crisis.”
MT Finance director Tomer Aboody says: “With such low numbers of properties coming to the market, it’s not surprising prices continue to rise as buyers compete for limited stock.
‘With interest rates rising, along with inflation and house prices, first-time buyers and movers are facing even tougher conditions with the market running away from them.”
“Getting more properties onto the market is key. A restructure of stamp duty might encourage potential sellers to enter the market knowing that the cost of moving, whether upsizing or downsizing, is lower, and therefore more affordable.”
Quilter mortgage expert Karen Noye says the latest figures shows “UK inflation surpassed expectations and now sits at 9.4% as continued high energy and petrol prices take effect”.
“With the Bank of England expecting inflation to peak at around 11% later this year, a 50 basis points rate hike could well be on the cards at the Bank’s next monetary policy meeting. If this is the case, people’s spending power will be reduced and the already dwindling number of cheap mortgage rates will quickly disappear. With wages failing to keep up, the high costs of moving could put off prospective buyers and first-time buyers will see their hopes of getting a foot on the property ladder pushed further out of reach.”
“A dip in demand could see a slowdown in the housing market over the coming months, and we could see a reversal of prices coming into the autumn when the true scale of the energy crisis unfolds. The UK continues to face a severe financial problem and the housing market will face its biggest challenge yet as the cost-of-living crisis takes hold,” Noye adds.
