Halifax House Price Index July 2022

UK house prices increased 11.8% YoY in July according to mortgage lender Halifax.
On a monthly basis, prices dropped 0.1% - the first decrease since June 2021.
The average UK property now costs £293,221.

House prices begin to ease

Source: Halifax, IHS Markit

Key trends

Following a year of exceptionally strong growth, UK house prices fell month-on-month in July for the first time since June 2021, albeit marginally (-0.1%).
This left the average house price at £293,221 in July, down £365 from the previous month’s record high.
The rate of annual inflation eased slightly to +11.8%, from 12.5% in June, but house prices remain more than £30,000 higher than this time last year.
While London continues to record slower annual house price growth than the other UK regions, the rate of +7.9% is the highest in almost five years.
Price gains for larger houses continue to outpace those for smaller homes. The price of a detached house has leapt +15.1% over the last year, compared to +7.7% for flats.

Outlook

While we shouldn't read too much into any single month, especially as the fall is only fractional, a slowdown in annual house price growth has been expected for some time, and further moderation seems the most likely scenario over the second half of 2022.
House prices will come under pressure as market tailwinds fade further and the headwinds of rising interest rates and increased living costs take hold.
Leading indicators of the housing market have shown a softening of activity recently, while rising borrowing costs are adding to the squeeze on household budgets against a backdrop of exceptionally high house price-to-income ratios.
That said, some of the drivers of the buoyant market – such as extra funds saved during the pandemic and fundamental changes in how people use their homes, remain evident.
The extremely tight supply of properties for sale is also a significant long-term challenge that serves to underpin house price growth.