House price growth and sales volumes are proving more resilient than many might have expected given the increases in the cost of living and initial increase in mortgage rates.
Around the country, prices are rising fastest in Wales (+11.1%) and remain in double digits in the South West and East Midlands. London continues to lag well behind with average prices up 4% over the last year.
All markets are registering slower growth off of a high base. The rate of price increases remains well ahead of the 5-year average. It is expected that the rate of growth will slow over the second half of the year, but not as fast as we had projected at the end of last year due to the continued resilience in sales and buyer interest.
Market activity resilient in the face of economic headwinds
One-off pandemic impacts have continued to support the desire to move, and sales volumes in H1 which are 10% down on last year.
Total sales set to exceed our original projections – we expect 1.3m sales completions in 2022, 100,000 higher than forecast.
More activity means the rate of price growth will not slow as fast as we expected, even if there were sharp drop in demand.
We expect house prices to end the year 5% higher over 2022.
The market is not immune from higher borrowing costs. Levels of activity will slow faster over Q3 and into Q4. The scale of the slowdown will depend upon how high mortgage rates rise.