Housing market retains ‘surprising momentum’ despite house price rates ‘slowing’
The latest HPI shows that annual house price growth slowed “slightly” to 11.2% in May from 12.2% in April. After accounting for seasonal effects, prices are 0.9%. Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said: “May saw a slight slowdown in the annual house price growth rate to 11.2% from 12.1% in April. . Prices rose 0.9% month-on-month, after adjusting for seasonal effects – the tenth consecutive monthly increase, which kept annual price growth in double digits.
“Despite growing headwinds from squeezed household budgets due to high inflation and steadily rising borrowing costs, the housing market has maintained surprising momentum.
“Demand is supported by strong labor market conditions, where the unemployment rate has fallen to a 50-year low, and with job vacancies at a record high.
“At the same time, the stock of housing in the market has remained low, maintaining upward pressure on house prices.”
The expert noted that this is not the end of the slowdown in the housing market, due to inflation pressures.
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The survey also revealed that households are considering moving to a larger property in order to get more space.
More than half of them plan to improve their property.
Mr Gardner added: “Our recent housing market survey revealed that, in addition to the growing number of people wanting to move, more than half of respondents (54%) are considering improving their home.
“The most popular option for those looking to make improvements was to add or maximize space, with more than a third (37%) citing this as a motivating factor.
“Interestingly, 29% of respondents wanted to improve energy efficiency or reduce the carbon footprint of their home.
“This consideration has become increasingly relevant in light of soaring energy costs, although decarbonising and adapting the housing stock is also important if the UK is to meet its emissions target. of 2050.”
The expert also explained that since 1952, an increasing number of people have owned their own homes.
Robert said: “2022 marks the Queen’s Platinum Jubilee and it is also 70 years since we produced our first house price data.
“The housing market was very different in 1952, with only 32% of households owning their own home, compared to 65% today.
“The average house price in the UK in 1952 was £1,891, or around £62,000 in today’s money.
“This means that current average house prices are 4.3 times higher than 1952 levels in real terms (taking retail price inflation into account).”
Industry experts have also said that 2022 continues to set new records, despite rising inflation rates.
James Forrester, Managing Director of Barrows and Forrester, said: “Despite rising inflation, the cost of living crisis and rising interest rates, the UK property market remains challenging and it is fair to say that the pandemic housing market boom has now become the post-pandemic norm, with stable land values in the face of broader economic instability.
“As a result, many homeowners decide to upgrade rather than move in order to increase the size of their home to meet their lifestyle needs.
“This will only limit the already insufficient level of housing available to buyers in the current market, which will ensure that even with a reduction in buyer demand, housing prices will remain supported for the foreseeable future.”