Halifax House Price Index August 2022

UK house prices increased 11.5% YoY in August according to mortgage lender Halifax.
On a monthly basis, prices increased 0.4% in August (vs -0.1% in July)
The average UK property now costs £294,260

House prices begin to ease

Source: Halifax, IHS Markit

Key trends

The slight fall seen in average house prices in July (-0.1%) was offset by a return to growth in August – although the monthly rise (+0.4%) was below the average rate seen over the last year, indicating a modest slowdown.
Over the last year the rate of monthly house price inflation has averaged around +0.9%.
The typical house price reached another record high in August (£294,260) – as it has done in seven out of the eight months so far this year.
However, the annual rate of growth dropped to +11.5%, from +11.8% in July, the lowest level in three months.
While London continues to lag behind other UK regions, the rate of annual house price inflation in the capital rose again to +8.8% in August, its highest level in over six years. Average house prices in London have risen by £44,669 over the last 12 months.

Outlook

While house prices have so far proved to be resilient in the face of growing economic uncertainty, industry surveys and forward-looking indicators point towards cooling expectations across most UK regions, as buyer demand eases.
Sharp rises in living costs is likely to constrain the amounts that prospective homebuyers can afford to borrow, on top of the adverse impact of higher energy prices on the wider economy.
While government support may counter some of these impacts, borrowing costs are also likely to continue to rise, as the Bank of England is widely expected to continue raising interest rates into next year.
With house price to income affordability ratios already historically high, a more challenging period for house prices should be expected.
However, this should be viewed in the context of the exceptional growth witnessed in recent years, with average house prices having increased by more than £30,000 over the last 12 months alone.