UK property market cools

Property markets across the UK saw signs of slowing in June, although average prices rose on an annual basis as the rate of inflation soared, government data showed on Wednesday.

At the end of June, the average selling price of a property in the UK was £286,397 (US$344,850), up 7.8% from a year ago, according to the Office for National Statistics.

While the annual price growth still reflected an imbalance between supply and demand, it was also the result of the overall increase in the cost of living. The inflation rate in the UK hit 10.1% in July, a 40-year high, government data showed on Wednesday.

Compared to the 12.8% rise in May, the rate of price growth in June was much slower. Moreover, the average house price only increased by 1% between May and June, compared to an increase of 5.7% during the same period a year earlier.

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Another sign of market slowdown is the drop in the number of transactions, which fell by 7.9% between May and June. For properties worth £40,000 or more, the number of sales nationwide was 95,420 in June, down 54.3% from a year ago, according to the Office for National Statistics.

“Rising interest rates and rumors of a recession are dampening demand. In times of recession and when interest rates are higher, demand to buy properties tends to drop,” Anna Clare Harper, director of real estate technology platform IMMO, said in a statement on Wednesday.

However, “slowing growth should not be taken as an indicator of a major crash to follow,” she warned, as demand for buying and renting properties still outweighs demand. offer.

The average price of detached houses in London has been exceeded £1 million

In London, the average house price rose by 6.3% a year to £537,920. Detached homes saw the biggest increase, up 8.5% to an average of £1.08million. The average apartment price was £447,046, up 5% year-on-year, the slowest rate for any property type, official data showed.

“Overall, the London property market remained extremely active throughout the second quarter of the year and supply continued to be outpaced by demand, putting further pressure on prices” , said Richard Davies, managing director of Chestertons, a London-based estate agency, in a statement. statement.

Central London is expected to remain a competitive market as investors “are drawn into the market by rising rents and the potential for higher profits”, he added.

Penny D. Jackson