House prices continue to soar across the UK

by Luke Betts

As UK inflation hits a 40-year high of 9%, the latest round of price hikes marks an eye-watering 54% rise in the energy price cap, affecting more than 22 million people across the nation. However, despite the cost of living crisis worsening and interests rates rising, house prices continue to soar across the UK.
According to data from real estate portal Rightmove, the average house price in the UK hit a record high for the fourth month in a row in May 2022. The latest months increase of 2.1% means house prices are at the highest they have been at this time since May 2014, and marks a national jump of £55,551 in asking prices in the two years since the housing market shut due to the pandemic.
The high demand for housing and a growing shortage of willing sellers are the clear key factors driving UK house prices up. Rightmove revealed that the number of buyers contacting estate agents is up by a whopping 31% on the market of 2019, however the number of properties available to buy is 55% down on the levels seen in 2019. This a clear sign that the mismatch between supply and demand is the driving force behind the jump in house prices.
“The imbalance between supply and demand persists, with an insufficient number of new properties coming onto the market to meet the needs of prospective buyers and strong competition to secure properties driving up prices.“
⁃             Russell Galley, Managing Director of Halifax
Although it’s difficult to make solid predictions on the housing market, experts believe that with high inflation pushing interest rates up and households across the UK struggling to deal with the increased cost of living, the housing market should cool down towards the end of 2022 and into 2023.
Halifax say, although house prices have increased sharply again, the rate of house price growth is still expected to slow as incomes are squeezed.
“We anticipate that the effects of the increased cost of living and rising interest rates will filter through to the market later in the year, and a combination of more supply of homes and people weighing up what they can afford will help to moderate the market.” 
⁃             Tim Bannister, Rightmove’s Director of Property Science

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