House prices in the UK hit a sixth straight record high in July, a house price index compiled by Rightmove PLC showed on Monday, but the property portal expects prices to cooling off for the rest of 2022.
Average house prices increased to £369,968 in July, up 0.4% or £1,354 on the previous month.
‘A continuing desire to move and low numbers of homes for sale are driving further price growth even at a time when personal finances are becoming increasingly stretched,’ Rightmove explained.
It noted buyer demand continues to exceed historically normal levels and is now 26% higher than at the same time in 2019, but is down 7% on June 2021.
‘Having more new sellers this month is a win-win for the market, as these sellers will likely achieve good prices for their homes given the sixth asking price record in a row that we’ve now seen, which may help to explain the increase in new stock coming to market over the last year, ’ Tim Bannister, Rightmove’s director of Property Science, said.
‘For those looking to buy, it means more choice, and a slight easing in competition against other buyers while the market is still moving very quickly. In the current fast-changing economic climate, those looking to buy who find a suitable home they can afford, may choose to act now rather than wait.’
Rightmove noted that record property prices, combined with rising interest rates, mean that the average first-time buyer monthly mortgage payment for someone taking out a two-year fixed rate is now 20%, or £163, higher than at the start of the year, now standing at £976 per month
‘While more choice is welcome news, the number of homes available remains well below the more normal levels of 2019 and is unable to satisfy the continued high demand that we’re seeing. Though a softening in demand is moving the market from a boil to a simmer, it remains 26% up on 2019,’ Bannister added.
Owing to the ‘imbalance’ between supply and demand, Rightmove revised its 2022 price growth prediction for the end of the year higher to 7% growth from 5%. It noted this still marks a slowdown from the 9.3% annual rise seen this month.
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