UK house price growth slows as interest rates rise
UK house price growth slowed in March, thanks to the rise in interest rates with further increases expected over the coming months as the Bank of England seeks to contain inflation.
The latest house price data published for March 2022 show that average house prices in the UK increased by 9.8 percent in the year to March 2022, down from 11.3 percent in the year to February 2022 . The average UK house price was £278,000 in March 2022, which is £24,000 higher than this time last year.
According to the data available, house prices growth across the United Kingdom was resilient in the first quarter but declined as the as the cost-of-living crisis hammers the property market. Pundits have warned that the capital may bear the brunt of the decline with a 10 percent drop by 2024, while prices fall by five percent in other regions across the country.
In England the March data shows, on average, house prices have risen by 0.3 percent since February 2022. The annual price rise of 9.9 percent takes the average property value to £297,524. The regional data for England indicates that:
the East Midlands experienced the greatest increase in its average property value over the last 12 months with a movement of 12.4%
London saw the most significant monthly price fall with a movement of -0.9%
the East Midlands experienced the greatest monthly growth with an increase of 1.2%
London saw the lowest annual price growth with an increase of 4.8%
Price change by region for England. The March 2022 data shows, on average, house prices have risen by 0.3% since February. The annual price rise of 9.9% takes the average property value to £297,524. Source: HM Land Registry
It may be recalled that last week, the Bank of England increased its interest rate from 0.75 percent to one percent - the highest level in 13 years - to contain rampant inflation. Analysts therefore believe property values in the capital could fall six percent next year and a further four percent in 2024, with similar drops expected across the South-east.
In the meanwhile, data released by housing giant Halifax, relating to a period before the Bank of England raised rates, show that there was not much sign of a slowdown in April. Britain's biggest mortgage lender pointed out that a “race for space”, which began during the pandemic, is likely to continue as people move out of apartments in cities to larger houses in more rural areas.
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