By Legal Futures Associate Search Acumen
Latest ONS HPI figures have been published this morning and show:
- On a seasonally adjusted basis, average house prices in the UK increased by 1.1% between July and August 2022, following an increase of 1.3% in the previous month.
- UK average house prices increased by 13.6% over the year to August 2022, down from 16.0% in July 2022.
- Despite UK house prices increasing between July and August 2022, annual growth has slowed because of the sharp rise in house prices in August 2021 following changes in the stamp duty holiday.
- The average UK house price was £296,000 in August 2022, which is £36,000 higher than this time last year.
Andy Sommerville, Director at Search Acumen, the property data and insight provider, comments:
“Although gilts and sterling rallied on Monday as the Government heeds market calls for economic stability, the last two weeks have shown us that anything could change at the drop of a hat. Homebuyers are no more fans of uncertainty than traders, and today’s 1.1% rise in house prices for August may be the last we see for some time as consumer confidence hits the breaks. We’ve seen Rightmove note overall buyer demand has slumped 15% compared with the same fortnight in 2021, indicative of a cold winter ahead.
“If the new mood music from the Treasury can reassure global financial markets, this should ultimately reduce the ceiling on future increase rate rises from the Bank of England. But in comparison to the last decade, elevated mortgage rates are going to be a fact of life for the foreseeable future, which will inevitably impact supply and demand. With mortgage offers at risk of being revised or withdrawn, there will be more pressure than ever on the wheels of the property transaction process to turn smoothly and swiftly to get transactions over the line. Policy changes announced on Monday mean we are likely to see the energy crisis rise again in April, bringing with it a new wave of uncertainty.
“In order to keep transactions in motion and ward off house prices falls, the Government needs to up its focus and commitment on tackling planning reform and pursuing digital transformation to give the industry greater resilience. A digitally enabled property buying process can dramatically cut transaction times and reduce the risk of fall-throughs from expiring mortgage offers. As competing pressures push and pull the market in different directions, streamlining our archaic property purchase system is vital.”
