People Are Panic Buying Homes As Prices Skyrocket Around The World
May 15, 2021
August 5, 2022
House prices dropped by 0.1 per cent month-on-month in July, marking the first decrease in more than a year, according to mortgage lender Halifax.
Across the UK, the annual rate of price growth slowed to 11.8 per cent, down from 12.5 per cent in June.
House prices slipped back for the first time since June 2021 in monthly terms and the market is likely to weaken further as interest rates go up and the cost-of-living squeeze tightens, Halifax said.
They had risen by 1.4 per cent in June.
The weakening of the house market comes after a boom triggered by the Covid-19 pandemic and the switch to working from home which pumped up demand for bigger homes, and by rock-bottom borrowing costs which are now rising again.
Russell Galley, Halifax managing director, said: “While we shouldn't read too much into any single month, especially as the fall is only fractional, a slowdown in annual house price growth has been expected for some time.
“House prices are likely to come under more pressure as those market tailwinds fade further and the headwinds of rising interest rates and increased living costs take a firmer hold.
“Therefore a slowing of annual house price inflation still seems the most likely scenario.”
Rival mortgage lender Nationwide said earlier this week that house prices rose in July at the slowest monthly pace in a year and Bank of England data showed the lowest level of new mortgage approvals in two years in June.
This week, property website Zoopla predicted annual house price growth in the UK will slow to 5 per cent from 8.3 per cent by the end of 2022.
The BoE raised interest rates on Thursday by the most since 1995, taking the Bank Rate to its highest level since 2008, as it seeks to limit the damage from a surge in inflation which is now expected to surpass 13 per cent later this year.
Halifax said London continued to record slower annual house price inflation than other regions in July but the 7.9 per cent growth rate was the highest in almost five years.
A typical UK property now costs £293,221, Halifax said.
Alice Haine, personal finance analyst at investment platform Bestinvest, said: “While buyer enquiries are starting to slow, the market’s relative buoyancy is being driven by high employment levels and the low number of properties hitting estate agents’ books, meaning buyers are still forced to battle it out to secure their dream home.
“With some homeowners now more reluctant to sell, as they delay any plans to upsize or downsize for fear of being hit by higher mortgage rates, low supply levels have exacerbated this scenario.
Source: The National
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