If any prospective homebuyers were hoping that the economic difficulties the UK is facing would cool off the housing market, they may at least have some more time to wait as prices continue to rise.
The latest Halifax House Price Index has revealed that in August, prices increased by 0.4 per cent, up compared with a 0.1. per cent dip in July, taking the average to a new record high of £294,260.
On an annual basis there was a slight drop from July’s 11.8 per cent, but at 11.5 per cent it is clearly some way off fulfilling the idea that prices might plunge as they did in the 2008-09 recession, despite the Bank of England’s prediction that the UK is heading for a lengthy downturn.
Those seeking property for sale in Leicester may also note there are regional variations, although the East Midlands comes in the middle of the scale; the highest house price inflation remains in Wales, followed by the south-west, while London still trails the rest of the UK but is gradually catching up.
Halifax director of mortgages Richard Kinnaird noted the persistence of high prices so far, but did forecast a “more challenging period for house prices”, not least as the Bank of England may well raise interest rates again to combat inflation.
The Royal Institution of Chartered Surveyors (RICS) has also signalled a house price slowdown. Its surveys work by comparing how many surveyors see an increase in prices compared to witnessing a fall, with 53 per cent more noting a rise in August. However, while well up on the long-term average balance of plus 13 per cent, it is down from the plus 62 per cent balance recorded in July.
Moreover, this was accompanied by a large drop in new buyer enquiries to the lowest level since April 2020, when lockdown prevented physical house viewings.
So, while the cost of buying a home has continued to increase, there are signs of at least be a cooling of the market in the months ahead, even if not the kind of major downturn seen in the late 2000s.
