UK house prices increased by 8.3% or £19,800 in the past 12 months, and strong demand and healthy volumes of new sales agreed in the first half of the year continue to support the headline rate of growth.
New sales agreed remain in line with last year while stock levels have started to rebuild off a low base, boosting choice for buyers. The average UK estate agent has 14 homes for sale, up from a low of less than 12 in the spring but below the pre-pandemic level of 20.
Buyer demand is registering the usual summer slowdown and underperforming last year, as economic uncertainty increases. Buyer interest this summer is weaker than last year but still above the 2017-2022 average. While allowing for seasonal factors, it is expected that demand will continue to underperform against last year as we move into the autumn.
Demand weakening over summer, more so than last year
New sales volumes holding up, supporting headline price growth
Cost of living hitting lower income households hardest, while those that buy homes tend to be on higher incomes
Higher mortgage rates to have a greater impact on activity in H2 • Mortgage rates for new buyers on track for 4%. The average first-time buyer will need an extra £12,250 in income to buy a home compared to a year ago and up to £35,000 more in London.
Higher mortgage rates will impact activity and prices in higher-priced, unaffordable markets and less so in lower value markets.