UK house prices: Halifax warns of ‘more challenging period’ | Housing market

The median price of a UK house rose again in August, although the annual growth rate slowed as the country’s biggest lender warned that a “more challenging period” for house prices lay ahead.

The median home price was £294,260 in August, up 0.4% from the previous month, and marking another all-time high, according to Halifax.

He called the monthly increase “relatively modest” compared to the rapid house price inflation seen in recent times, where the average monthly increase in house prices has been 0.9%.

The increase in August marked a return to growth in house prices, after fell in july for the first time in over a year. Halifax warned at the time that higher interest rates and the broader cost-of-living crisis would have an impact.

The annual rate of house price growth fell slightly last month, to 11.5% from 11.8% in July, the lowest level in three months. The price of an average house has increased by more than £30,000 in the last 12 months.

The Bank of England announced its Biggest rise in interest rates in 27 years in early August, raising the UK base rate to 1.75%, a 13-year high, in a bid to rein in runaway inflation as gas prices drive up UK energy bills. The central bank’s monetary policy committee will reassess interest rates in mid-September and is expected to continue raising rates over the next year.

“So far, home prices have proven resilient in the face of growing economic uncertainty,” said Kim Kinnaird, Halifax’s director of mortgages.

However, he added: “Industry surveys point to a cooling of expectations in most UK regions as buyer demand declines and other forward-looking indicators also imply a likely slowdown in market activity. “.

Increases in the energy price cap in October and beyond are expected to add to the pressure on household finances, Halifax said, which will also limit the amount prospective home buyers can borrow.

“With the home price and income affordability ratio already historically high, a more challenging period for home prices should be expected,” Kinnaird said.

Wales continues to be the country with the highest annual house price inflation, where prices have increased by more than 16%, the highest level of growth since the beginning of 2005. This means that average prices in Wales have risen by £31,246 over the past year, taking the price of a typical house at £224,858.

House prices in London have risen more slowly than in other areas of the UK, although they generally started from a higher base.

However, annual price inflation in the capital has now reached 8.8%, the highest level in over six years, taking the price of a typical property to a record £554,718.

The price of an average house in London has increased by £44,669 in the last 12 months.

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