16 August 2023
If you are covering the latest government house price index, please see the following comment from Rosie Hooper, chartered financial planner at Quilter:
“The latest government house price index shows the property market has remained remarkably resilient despite the intense squeeze on affordability as house prices increased by 0.7% in June. However, year on year prices increased by just 1.7%, down from 1.9% in the 12 months to May 2023 and the lowest increase since 2020.
“The overall resilience of the market is somewhat surprising given the headwinds it currently faces. Despite the challenges, it appears that while buyers are having to reassess how far their money can go, in most cases they are continuing to move forward with purchases if they can.
“However, the Bank of England is now widely expected to march ahead with further rate hikes given high wage growth and inflation still far above the Bank’s 2% target. If the Bank opts to push rates higher once again, this could put additional stress on property prices as affordability is squeezed and further downward pressure on house prices is therefore not yet off the cards.
"Once inflation starts to come down to the Bank of England’s target of 2%, it is expected to start to reduce the pressure it is exerting on the economy through interest rate rises. This will help release the pressure on the housing market and we may start to see prices increase further as more people feel comfortable to enter the market or move home.
“Ultimately, the housing market remains highly unpredictable, and anyone nearing the end of their current mortgage deal or looking to buy in the short term should therefore seek professional mortgage advice as soon as possible.”
