UK annual house price growth slowed sharply in June, ONS data shows | House prices

The annual pace of UK house price growth has slowed sharply, falling from 12.8% to 7.8% in a month, according to official data indicating that the cost of living crisis is slowing the property market.

The Office for National Statistics said the value of an average home in the UK rose by £3,000 in June, bringing the normal price to £286,000. That is € 20,000 more than a year earlier.

While the annual growth rate has slowed, Ceri Lewis, a statistician at the ONS, said “house prices continue to rise, and average prices have now reached record levels in England, Wales and Scotland”.

At the same time, rents have continued to rise across the country, with a “sustained rebound” in London.

The most recent ONS data, which runs through the end of June, follows figures from other sources through late July or early August that indicate house prices are beginning to fall as higher interest rates and the broader cost of living crisis kick in.

Earlier this month, the Halifax, one of Britain’s largest mortgage lenders, said house prices fell for the first time in more than a year in July, while property website Rightmove said on Monday they had fallen for the first time in 2022.

However, the ONS reduced the slowing pace of annual house price inflation to “the price increases in June 2021, which were the result of changes in tax breaks”.

Sarah Coles, a senior personal finance analyst at the investment firm Hargreaves Lansdown, said last year’s holiday had skewed its annual figure.

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“A large part of the drop [from 12.8% to 7.8%] is due to the fact that it is compared to last June, when the price increases peaked. This was when the most generous period of the stamp duty holiday came to an end, and people rushed to take advantage – huge prices.”

She added: “For a clearer picture, it’s worth checking the month-on-month figures. This shows that prices have increased by an average of £3,000 between May and June.”

The ONS said in England the average house price had risen by 7.3% over the 12 months to £305,000. In Wales, the average figure rose 8.6% to £213,000. In Scotland, normal prices rose 11.6% to £192,000, while in Northern Ireland they rose 9.6% to £169,000.

Separate ONS data showed that private rents paid by UK tenants typically grew by 3.2% in the 12 months to July, from 3% in the year to June. The ONS said this represented “the largest annual growth since this streak began in January 2016”.

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