The average price of a house in the UK again rose in April, making
it the longest run of consecutive increases in six years according to Halifax’s
latest report. However, the lender added caution that rising interest rates and
a squeeze on household budgets could cool the market over the next year.
The average cost of a home rose by 1.1% in April, the 10th
consecutive monthly rise in the longest run since 2016, to a record high of
£286,079.
The housing boom was fuelled by people reassessing what they
needed from their home, prioritising more indoor and outdoor space, home
offices and proximity to parks, and this desire will continue to push house
prices higher for the time being.
“For now, at least, despite the current economic
uncertainty, the strong increases we’ve seen in house prices show little sign
of abating,” said Russell Galley, the managing director of Halifax.
“Housing transactions and mortgage approvals remain above
pre-pandemic levels, and the continued growth in new buyer inquiries suggests
activity will remain heightened in the short-term. The imbalance between supply
and demand persists, with an insufficient number of new properties coming on to
the market to meet the needs of prospective buyers and strong competition to
secure properties driving up prices.”
Last week, the Bank of England raised interest rates from
0.75% to 1% to tackle increasing inflation, which is expected to rise above 10%
this year, the highest level since 1982, as home energy bills are expected to
jump again in October.
“The headwinds facing the wider economy cannot be ignored,”
Galley said. “With interest rates on the rise and inflation further squeezing
household budgets, it remains likely that the rate of house price growth will
slow by the end of this year.”