Our UK housing market update – covering sold and asking prices, market sentiment and the property outlook for the year ahead.
HM Land Registry – Sold Prices
UK house prices increased by 12.8% in the year to May 2022, up from 11.9% in April.
On a non-seasonally adjusted basis, this reflects an increase of 1.2% between April and May. It’s a large jump, compared with an increase of just 0.4% the year earlier.
House prices increased most in the South West of England over May (at a massive 16.9%), whilst London sold prices continued at a comparatively sluggish 8.2%.
In good news for market activity, the Bank of England reported a modest increase in the number of properties for sale across the UK. Indeed, according to UK property transaction statistics, the number of residential property sales increased by 1.3% between April and May. Mortgage approvals similarly saw a small increase. Nonetheless, this was still 5.1% lower than a year ago.
Rightmove – Asking Prices
Rightmove report average property prices once again hit another record high – for the six consecutive month. This meant average asking prices rose to £369,968 in July 2022, reflecting a monthly increase of 0.4%.
First-time buyers are now facing record prices alongside rising interest rates, meaning monthly mortgage payments are 20% higher than the start of the year.
Ongoing desire to move alongside a shortage of new homes is keeping price growth high, even with personal finances squeezed to an unprecedented extent. Indeed, buyer demand is up by 26% on the same period in 2019 whilst housing stock is down by 40%.
Whilst stock is slowly recovering, Rightmove has revised its 2022 price forecasts as a result of the continued imbalance between supply and demand. Asking price growth is now expected to reach 7% by the end of the year, up from 5% forecast at the start of 2022.
RICS – Chartered Surveyor Sentiment Survey
The latest RICS UK Residential Market Survey for June 2022 points towards gradually softening buyer demand but continued price rises. Intriguingly, buyer enquiries are more resilient in London (+7%) compared with the rest of the UK (-27%).
Despite this, respondents still report increases in house prices across all areas of the UK (noted by +65% of participants). Growth is slackening however, with only +37% of respondents predicting further price rises by the end of the year, down from +78% of February 2022. Even so, house prices remain resilient with half of all contributors reporting completions coming-in over asking prices (for homes listed up to £500,000).
The volume of agreed sales was down to -13% (compared with -5% the month previous), with expectations falling to -21% at the twelve month horizon. This is largely due to new instructions remaining more or less flat (at -1%) and market appraisals largely unchanged.
Zoopla – Housing Market Outlook
In their August House Price Index report, Zoopla still predict price rises of 5% by the end of 2022.
Despite this, people all over the country are increasingly feeling the squeeze from cost of living pressures, less disposable income and rising mortgage rates. Combined, these factors are likely to dampen homeowners’ desire to move. These developments are likely to become more evident towards the end of this year, and into the early months of 2023.
Consequently, Zoopla predict less demand for “aspirational” areas such as rural and coastal locations that saw massive rises during the pandemic. Indeed, house price growth is already slowing in areas sic as Truro (Cornwall), Torquay (Devon) and Canterbury (Kent). Buyer demand is now -16% below five year averages and over 20% below the previous month.
Express Index
For a full, comprehensive breakdown of current property market activity. Visit our Express Index here
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