30 June 2022
If you are covering the latest Nationwide House Price Index for June, please see the following comment from Charlotte Nixon, mortgage expert at Quilter:
“Nationwide’s latest UK house price index for June shows the pace of house price growth finally looks set to be slowing, with annual growth dipping to 10.7% in June, down from 11.2% in May. However, month-on-month we are still yet to see a decrease in house prices as June saw a seasonally adjusted 0.3% uptick, with the average house now costing £271,613.
“We are continuing to witness the impacts of soaring inflation which now sits at 9.1% and is expected to run into double figures later this year, the rising cost of living, increasingly high energy bills and minimal support from the government – all of which are causing people to tighten their purse strings. What began as a ‘pinch’ on people’s finances has fast become a heavy burden on an increasing number of households. What’s more, the Bank of England recently hiked interest rates to 1.25% and is expected to increase them further still to tackle inflation, which will reduce people’s spending power and cause the already dwindling number of cheap mortgage rates to quickly disappear. With wages failing to keep up, the high costs of moving home will put off prospective buyers and first-time buyers will see their hopes of getting a foot on the property ladder pushed further out of reach.
“This reduction in demand could soften house prices as we move further into the summer, and we could see a reversal of prices coming into the autumn when the true scale of the energy crisis is laid bare as temperatures drop. The UK is facing a severe financial problem and while the housing market managed to defy expectations and overcome the immediate problems of the pandemic, the cost-of-living crisis will be its biggest challenge yet.”
