Northern Ireland topped the table again this month for annual house price inflation, seeing prices rise by 15.2%, equating to an average of £185,386.
The South West of England also recorded a strong rate of annual growth at 14.5%, with an average property cost of £305,173, alongside Wales at 13.7%, where a home is now a record of £216,120.
Overall, nine regions of the UK registered double-digit annual inflation, with only Yorkshire and the Humber, Scotland and London in single figures. Nonetheless, buying a home in the capital today would still require
£541,942, on average.
In Scotland, growth continues to underperform relative to the UK average, with annual inflation at 8.3%. A home in the country now costs an average of £198,288.
A decade of house price growth
Over the past decade, the cost of a home has risen by 74%, or by £123,016. The strongest inflation has been in London (84.2%), followed by the East of England (84.0%) and the East Midlands (82.1%). In cash terms, London house-hunters need £247,638 more than those looking ten years ago, whereas those in the East of England need £153,930 and the East Midlands £108,116.
The relative underperformance - compared to the UK average - of London in 2022 is in stark contrast to ten years prior. In May 2012, the capital was performing better than anywhere else in the UK, with annual house price inflation of 4%. Overall, the South was leading a recovery in property prices following the recession of 2008 and 2009, with the South East (2.5%) and East of England (1.7%) the next best performers.
In some regions, the picture in 2012 contrasts sharply with [the one] today. A decade ago, Northern Ireland had experienced a house price fall of 9.6% year on year, with the Welsh market seeing a drop of 1.2%.
Russell Galley, Managing Director, Halifax, said: “The average cost of buying a home in the UK is up 1%, or £2,857, on last month, and has now risen for eleven consecutive months. Annual growth also remains in double-digits, at 10.5%, although this is the slowest rate of growth seen since the start of the year.
“The average cost to buy a home in the UK is now £289,099, hitting yet another record high. Despite the very real cost of living pressures some people are experiencing, the imbalance between supply and demand for properties remains the primary reason driving the continued climb in house prices.
“For house hunters, the extent of the impact of property price inflation continues to be linked to the type of home they are looking to buy. Compared to May last year, you’d need around £10,000 more to buy a flat, but an additional £50,000 for a detached home. This clearly creates a knock-on effect for those looking to make their first home move, as the rungs on the housing ladder have become increasingly wider.
“However, the housing market has begun to show signs of cooling. Mortgage activity has started to come down and, coupled with the inflationary pressures currently exerted on household budgets, it’s likely activity will start to slow.
“So, there is perhaps one green shoot for prospective purchasers; with overall buying demand down compared to last year, we may be past the peak sellers’ market.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, says: "As house prices continue to rise, albeit, at a slower pace, there are still plenty of signs of strong activity in the market even though some of the heat has come out of it.
"Concerns about rising interest rates mean mortgage brokers are being kept busy as borrowers rush to secure a fixed rate. With many lenders pulling products at short notice, and repricing upwards, as nobody wants to be left at the top of the ‘best buy’ tables for long, it is proving to be a frustrating time for many.
"Longer-term fixes remain the product of choice in order to ride out future volatility and uncertainty as best as possible."
Anna Clare Harper, director of real estate technology platform IMMO, says: "According to Halifax, May saw the eleventh successive monthly increase, keeping house price growth in double digits at 10.5%. Meanwhile, the latest HMRC figures show transactions down by 12% year on year.
"Many will be wondering why house prices remain so buoyant, in the context of post-Covid, post-Brexit and mid-Ukraine turmoil and such a fall in transaction volumes.
"Much like for the wider economy, house price inflation is being driven by shortages of supply. This shortage relates to housing in general and quality housing that people can afford, in the places they want and need to live. For homeowners, it’s great news. But socially, this is a huge problem, only now becoming clear.
"‘Mom and pop’ landlords are leaving the market, increasingly fearful of the 168 laws and regulations governing residential property and its management, rising interest rates and the tax implications of Section 24. Many are selling up. The trouble is, in the context of rising house prices, rental properties have never been more important.
"Building new properties can help. However, affordability is at a crunch point and across England, full-time employees must spend around 9 times their annual earnings on purchasing a home. We are far beyond the point where building new homes could plug the supply gap in the places people want to live.
"Instead, long-term institutional investment is vital to fill the gap left by smaller private landlords. For these investors, and for the people and communities they rent to, there is an opportunity to redress the balance through a genuinely long term, sustainable approach."
