UK house prices rose 7.8% in the year to June, a slowdown from the 12.8% annual rate recorded in May, the Office for National said on Wednesday. Statistics.
However, the slowdown in the growth rate was distorted by “the rise in [house] prices seen in June 2021, which resulted from changes to tax relief,” the ONS noted.
The increase comes despite a recent rise in mortgage costs, following the Bank of England’s decision to raise its key rate from 0.1% in December to 1.75% this month, in a bid to curb inflation. Economists expect further rate hikes in the coming months, which will further increase mortgage repayments.
The average UK house cost £286,000 in June, £20,000 more than the same month last year, according to ONS data.
In England, the average price increased by 7.3% over the year to reach £305,000, by 8.6% to reach £213,000 in Wales, by 11.6% to reach £192,000 in Scotland and 9.6% in Northern Ireland to £169,000.
News of rising house prices came as the UK’s inflation rate jumped to 10.1% in July, the first time it recorded a double-digit annual rise in addition four decades.
Jean Jameson, sales director at Foxtons estate agents, noted that although London recorded the weakest annual growth of any region in the UK, the capital’s 8.2% increase from July 2021 represented the “biggest change in annual house prices since July 2016”.