For the tenth month in a row, house prices are rising, but the market remains cool.

According to a study, the average UK house price jumped by over £3,000 in April, recording the longest streak of monthly increases since 2016.  Estate agents in Winchester talk about how the cost-of-living problem is putting a financial strain on consumers, even as housing prices have continued to rise.

Halifax reported that the average house value increased by 1.1 percent, or £3,078.

“This was the 10th consecutive month that property values have increased, the longest run of continuous gains since the end of 2016,” said Russell Galley, the managing director of Halifax.

Despite mounting headwinds from the stress on household budgets caused by high inflation and a continuous increase in borrowing prices, Robert Gardner, Nationwide’s chief economist, said the property market had preserved “a surprising amount of momentum”. “Demand is being supported by strong labour market conditions, where the unemployment rate has fallen towards 50-year lows, and with the number of job vacancies at a record high. At the same time, the stock of homes on the market has remained low, keeping upward pressure on house prices.”

The average property price hit a new high of £286,079, up 10.8% from the previous year. According to the report, the real cause of the rise is an imbalance between property supply and demand. You’d need approximately £10,000 more to purchase an apartment as opposed to May the previous year, but an extra £50,000 for a standalone property.

The price of a typical property may reach £300,000 by the year’s end at the present rate of inflation, but Halifax said it is improbable given the expected economic circumstances. According to the survey, prices have risen by an average of £47,568 in the last two years. From October ’14 to April ’20, rates increased by £47,689 on average, taking five and a half years to achieve a comparable leap.

In May, Northern Ireland saw the highest annual home price inflation, with prices rising 15.2 percent. With 14.5 percent annual growth, southwest England likewise outperformed much of the country. House prices in Wales increased by 13.7 percent yearly, taking the average home value to a new high of £216,120.

In May, Yorkshire and the Humber, Scotland, and London saw annual price inflation of less than 10%. According to Halifax, the home price spike in Scotland continues to “underperform” the UK average, with yearly inflation at 8.3 percent.

The annual home price spike in London was the highest in the UK a decade ago, with inflation of 4%. However, London’s average property values remain far higher than the average of the UK, with the current average cost of £537,896 setting a new high for the capital, according to Halifax. Southern England was leading a housing price rebound at the time, following the recession of 2008 and 2009.

The fact that prices have risen by 74% in the last decade demonstrates how hostile the market is to first-time buyers.

“The latest data from the Halifax House Price Index adds to the mounting evidence that house price growth is being impacted by the uncertainty facing the wider economy…”, said Alice Haine, personal finance expert at investing platform Bestinvest. “With rising house prices, lower disposable incomes, and fewer people with the right debt-to-income ratio to qualify for a mortgage, some first-time buyers may delay their entry into the housing market, while existing homeowners may stick with their current home, focusing on a remodel or extension instead.”

House searchers in London will require £247,638 more than they did ten years ago, while the east of England will need £153,930 more and others in the East Midlands will need an additional £108,116.

This demand appears to be centered on bigger family houses rather than smaller assets such as apartments. Over the past year, prices for detached and semi-detached properties have risen by over 12%, compared to just 7.1% for flats. The net value growth for detached residences over the last year was just under £50,000, over five times that of flats.

With rates of interest on the increase and inflation pinching household budgets, even more, house price growth is expected to halt by the end of the year.

Property prices soared during the pandemic-fueled housing bubble as purchasers joined the “race for space,” causing house price inflation to be felt more severely in particular parts of the UK. When remote working became increasingly popular, city dwellers sought for larger and more rural estates.

“Our latest housing market report records a rise in new potential registered buyers per member estate agency branch to 84 in March,” said Nathan Emerson, chief executive of property professionals’ body Propertymark. “However, with the recent announcement made by the Bank of England on the increase in interest rates, this will undoubtedly show some effect within the market in the coming months,” he added.

“With another interest rate rise this month, and the potential for more, brokers are kept busy,” said Mark Harris, Chief Executive of SPF Private Clients, the mortgage broker. “Borrowers are becoming increasingly anxious about increasing mortgage rates and want to lock in a fixed rate as soon as possible.”

In the current uncertain economic time, the housing market appears to be at a fork in the road, with future increases unlikely to approach the significant surges seen in the previous 12 months. While there is still a significant desire among current homeowners to upgrade, the supply shortage that has fueled recent record growth is beginning to lessen. The probability of consumers’ actual wages falling this year as high inflation bites implies fewer individuals will be able to acquire the necessary price to cover at higher mortgage rates.

According to Halifax, below are the typical property costs in May and the yearly increase:

– East Midlands, £239,859, 12.3%

– Wales, £216,120, 13.7%

– Northern Ireland, £185,386, 15.2%

– Scotland, £198,288, 8.3%

– South East, £391,845, 11.4%

– London, £541,942, 6.3%

– North East, £166,449, 10.6%

– South West, £305,173, 14.5%

– Eastern England, £337,216, 11.6%

– West Midlands, £244,071, 10.6%

– Yorkshire and Humber, £200,469, 9.5%

– North West, £219,849, 10.6%

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