PwC Discusses ONS House Price Data For June

• House prices rise 7.8% in June with sustained momentum in the market, despite cost of living headwinds

Commenting on the latest house price data, Jamie Durham, economist at PwC UK, says:

“House prices rose 7.8% to a record £286,000 in June 2022. While this growth rate is a marked slowdown from the 12.8% increase recorded in May 2022, it primarily reflects high prices in June 2021 as buyers rushed to complete before the end of the stamp duty holiday, rather than a slowdown from wider economic pressures. 

“There appears to still be momentum in the market with prices in June 1% higher than in May, which is in line with the average over the first half of the year. This momentum, despite the weakening economic outlook, has been driven by the strength of the labour market, the accumulation of more than £200bn of savings during lockdowns, and a shortage of homes on the market relative to demand.

“However, we do expect the market to slow over the coming months as household finances come under increasing pressure due to the rising cost of living. 

“The combination of high inflation and falling real wages, increasing interest rates, and the threat of a recession later this year have all weighed on consumer sentiment and will stretch the affordability of buying a home. As such, households are likely to delay making such a major financial decision until their personal circumstances are clearer.

“There are already some signs of a slowdown of activity. Mortgage approvals have dropped slightly below historical averages over the last few months, and lenders have reported they expect demand for new mortgages to decline significantly over the coming months.”

Source : PwC

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