ONS house price figures reach new heights

Nick Leeming, Chairman of Jackson-Stops, comments on today’s ONS House Price Index results:

“Latest ONS HPI figures show house prices are continuing their one-track path, increasing by 12.8% over the year to May 2022, and 1.2% between April and May 2022 compared with an increase of 0.4% during the same period a year earlier. While prices are still reaching new heights despite an increasingly challenging backdrop for buyers, the later summer months will provide the real temperature check for the market.

“Jackson-Stops own data indicates a continually busy market that has seen both property listings and exchanges increase in July. Wider economic factors such as inflation and rising interest rates will naturally begin to squeeze the lower end of the market as the year progresses. But for now, it is playing into the hands of sellers who continue to benefit from the buying buzz, as movers look to lock in competitive mortgage rates ahead of further announcements from the Bank of England.

“A waning pipeline of new homes from housebuilders will also help to insulate house prices, even if growth levels cool from month to month. This is something that the newest Housing Minister, the 12th in 12 years, will need to tackle head on in order to create a market that works for everyone.

“Traditionally a quieter period, the combination of heatwaves and holidays over the next few months is likely to push house hunting down the agenda. This may result in a minor reduction in new applications and appraisals, but as we head into the autumn we expect buyers to return to their search as the push to be ‘in by Christmas’ continues in earnest.

“Properties at the higher end of the market and specialist listings may be sheltered somewhat from the market rebalancing. However, as the whole of the UK revaluates its budgets in light of the rising cost of living and ahead of the energy price cap changes in October, this will no doubt be front of mind for all buyers when they consider what they can afford.”