UK house prices are expected to maintain their upward growth trend despite a slowdown in demand, owing to a drop in home movers, given pervasive shortfalls in housing supply. Average asking prices have reached record levels, as inflation continues to impact the economy at large.
The UK average house price reached £369,968 for June, according to data from Rightmove, representing a 9.3 per cent annual increase. The supply demand imbalance is significant with available listings reducing 40 per cent over the course of the last two years whilst demand has risen 26 per cent.
This is the sixth consecutive month of house price rises given demand that has seen conveyancing waiting times go from 50 days on average to complete a purchase, after agreeing a sale in 2019, to 150 days in 2022. The latest Rightmove data indicates over half (53 per cent) of homes are being sold at or over their asking prices whilst 98.9 per cent achieved their final advertised asking price.
On the other hand, whilst remaining above pre-pandemic levels, the number of home movers experienced a 35 per cent drop over the course of the first half of 2022 (relative to 2021), according to Halifax research. Home movers comprise half (47 per cent) of all home buyers, down 9 per cent annually, and were buoyed by the short lived Stamp Duty Holiday over the course of the pandemic to make a record breaking number of home moves.
Apart from 2021, this still represented the busiest start, with respect to home movers, however is indicative of a marginal slow down in demand. First time buyers similarly are now spending 20 per cent more on average to take out a mortgage, relative to January 2022, and are leveraging schemes such as Help to Buy to complete home purchases as well as locking in longer term borrowing rates.
UK property surveyors expect house prices to keep growing over the next year despite a drop in new buyers because of a continuing lack of supply of homes to buy or rent. The Royal Institution of Chartered Surveyors, whose members appraise properties up for sale, said a balance of 65% of those surveyed recorded price increases in June, down from a high of 78% in April. Over the next year, 37% see continued growth.