Average UK home costs elevated by 15.5% within the 12 months to July, up from the 7.8% enhance seen in June, in line with the Office for National Statistics.
It is the very best annual inflation fee seen since May 2003, reflecting how costs in the identical month final 12 months had been affected by the tip of the stamp responsibility vacation, the ONS mentioned.
The common UK home value was £292,000 in July 2022, which is £39,000 greater than this time final 12 months.
Tom Bill, head of UK residential analysis at Knight Frank, mentioned: “The large jump in house prices recorded in July tells us more about how a stamp duty holiday can alter the course of the housing market than where prices are headed next.
“The new authorities’s power assist package deal mixed with report low unemployment will assist oil the wheels of the property market however rising mortgage charges will in the end curb the double-digit value development seen over the past two years though we do not count on costs to fall.
“The government is effectively in pre-election mode and further tax cuts will benefit the housing market in the short-term. The risk is that fiscal largesse today means rates will eventually need to rise faster.”
Mortgage charges rise anticipated to push home costs down
Gabriella Dickens, senior UK economist at Pantheon, mentioned: “Looking ahead, we expect house prices to fall outright in the second half of the year, given the size of the rise in mortgage rates.
“The fee on a two-year mortgage with a 75% LTV ratio leapt to three.64% in August, from 1.64% in January, and appears set to leap to round 4.5% by the tip of the 12 months, if markets are proper in regards to the present path for Bank Rate.
“Several of the timeliest indicators already have turned downwards.
“For occasion, the brand new purchaser enquiries stability of the RICS Residential Market Survey fell in August to its lowest degree for the reason that market was closed in the course of the first lockdown.
“There will be some offsetting support to prices, however, from the recently-announced cap on energy prices, which will limit the squeeze on real incomes, the ongoing scarcity of supply, and the resilient labour market.
“All informed, then, we predict that home costs will drop by about 2% over the subsequent six months after which will begin to get well in 2023, notably if the BoE holds again from growing Bank Rate as shortly as traders at the moment count on.”
Source: information.sky.com”