The average property prices increased by 1.8 per cent in June, the twelfth consecutive monthly rise. Taking the annual growth rate to 13 per cent – the highest since 2004. With the average property now costing £294,845, according to the Halifax. The housing market continues to defy expectations of a slowdown, even with rising interest rates and soaring inflation.
While the stamp duty holiday was thought to be behind the rise in property prices last year, that is now far behind us. Halifax said that the lack of property for sale, coupled with rising demand, is behind the sharp rise in prices. Simply, if a buyer is competing with other buyers for a property and wants to take advantage of mortgage rates before they rise further. They may well have to pay more than the list price, pushing values up higher.
Meanwhile, Halifax also raised its maximum loan-to-value on new-build homes to 95 per cent this week to make it easier for first-time buyers to get on the housing ladder. Previously, a ten per cent deposit required. This suggests a confidence in the new-build market and the UK construction industry.
It remains to be seen whether the political turmoil surrounding the resignation of Boris Johnson will create instability, having a negative impact on the housing market and prices. But with the prime minister aiming to stay in Downing Street until a new Tory leader has been elected to replace him in the autumn, rather than calling an immediate general election, the impact should be minimal in the short term at least.
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