UK house price growth slows in June

UK house prices rose at the slowest rate for 11 months, according to official figures, but property values were still up 7.8 percent in the year to June.

The annual increase in the average house price across the United Kingdom slowed from 12.8 percent the previous month, the Office for National Statistics (ONS) said. The slower rate of increase was skewed by “the rises in [house] prices seen in June 2021, which were the result of tax break changes”, the ONS noted.

Annual house price rates of change for all dwellings, UK, January 2006 to June 2022 Source Credit: Office for National Statistics.

The increase comes despite a recent jump in mortgage costs, thanks to the Bank of England’s (BoE) inflation restraining measures to boost its benchmark lending rate from 0.1 percent in December to 1.75 percent this month.

Despite UK house prices increasing between May and June 2022, annual house price inflation has slowed due to the rises in prices seen in June 2021, which were the result of tax break changes.

England house prices remain the highest in the UK. Above: Average house price by country, UK, January 2005 to June 2022. Source Credit: Office for National Statistics.

“While annual growth slowed, house prices continue to increase and average prices have now reached record levels in England, Wales and Scotland,” said Ceri Lewis ONS house prices statistician. “Rents continue to climb across the country, with sustained pick-up in London, which saw its strongest growth since the beginning of 2017.”

In the rental sector, the ONS noted that prices paid by tenants accelerated by 3.2% in the 12 months to July - the largest annual growth since January 2016. On the sales front, the average UK house price was £286,000 in June 2022; this is £20,000 higher than in June 2021, ONS said. This represents an acceleration from 3% in June and is the largest annual growth since January 2016.

Albeit the capital reported the lowest annual growth of any UK region, Jean Jameson, chief sales officer at Foxtons told the Financial Times, that the capital’s 8.2 per cent increase from July 2021 represented the “biggest change in annual property price since July 2016”.

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