UK house price growth slowed to 7.8% in June, amid rising interest rates, according to the latest figures from the Office for National Statistics.
Growth fell from 12.8% in May and marked the weakest growth since July last year.
Despite this, the same report found the average house price increased by £3,000 in June to £286,000. It represents a £20,000 increase on the same period of last year.
Simon Bath, CEO of iPlace Global, said: “The ONS report clearly shows that there has been a slowdown in housing market activity, however this is likely due to the fact that many people are currently on holidays. Strong demand for properties across the country will likely continue holding up prices in the next few months as Brits return to work. However, we are seeing smaller increments in the rise of prices, exhibiting signs that the property market could be on track for a slowdown in the latter half of the year.”
However, Bath said that for house prices to drop, there needs to be a change in the supply and demand imbalance and called upon the government to make it easier for first-time buyers.
Bath explained: “The government’s failure to deliver on their promise of 300,000 new homes a year has meant that domestic developers have come to the forefront of alleviating this issue. We are already seeing this through the increase in the number of sellers and we have proprietary research showing that almost a quarter of millennials are now looking to buy a home to develop not to live in.
“Hopefully this can further help to put the brakes on rising prices over the next year, with less competition making it easier for first-time buyers to make their way onto the property ladder. However, the government must also ensure that they create new schemes to replace old ones like Help to Buy. With borrowing costs set to jump up even more, government assistance will be even more crucial to ensure that everyone gets the opportunity to step on to the property ladder, even as prices continue to rise.”
David Hannah, group chairman at Cornerstone Tax, commented: “Whilst it is welcome news to see that asking prices dropped in August, this could be a summer holiday blip as opposed to a trend that’s here to stay. The problem we do have in the UK property market is the disparity between supply and demand.
“Whilst I do believe the impact of rising interest rates will gradually start to affect prices, we also have an open market in the UK which means not only are domestic purchasers and investors looking to buy, but we also have inbound investors. This means that even if demand cools domestically, international buyers could contribute to keeping prices high.”
