Real estate market ‘defies logic’ as property prices rise 13%

House prices rose 13% last year, the strongest annual growth since 2004, as experts warned the property market was ‘defying logic’.

Despite a cost-of-living crisis that has hurt household finances, home prices rose 1.8% in the month to June, the biggest monthly increase since the start of 2007, according to the lender Halifax. The monthly growth rate was up from 1.2 pc in May.

With the average house price now at £294,845, Halifax’s Russell Galley said the market had defied expectations of a slowdown due to strong buyer demand and a lack of supply.

Analysts had lowered their house price forecasts in recent months as successive interest rate hikes led to soaring mortgage costs and fears of a global recession.

However, Michael Aldridge, of mortgage advisers Lucra Mortgages, said the housing market had continued to “defy logic” and had exploded despite the growing number of “catastrophic prophecies”.

“Some analysts predicted the real estate market would be on its knees, but despite a seemingly perfect storm, it remains extremely buoyant,” he said.

Jonathan Hopper of Garrington Property Finders, a property consultant, said there had been a shift in which areas were gaining in price.

Northern Ireland has seen the highest house price inflation of any British region or nation, with annual growth of 15.2% taking the average cost of a house to £187,833, according to Halifax. Prices in Wales have also risen faster than the UK average, growing 14.3% to an average house price of £219,281.

Penny D. Jackson