Cost pressures begin to have cooling effect on UK house prices

It’s finally happened – signs are filtering through of the rate of house-price growth in the UK having begun to slow, albeit still being what has been described as “an insane rate of growth”.

Figures from Nationwide, and reported by The Guardian, showed that the average price of UK property increased for the ninth consecutive month, to £267,620 during April.
But the rate of growth was noticeably slower, which indicates that escalating inflation and the cost-of-living crisis are now starting to affect how much one might expect to pay for homes for sale in Weybridge or elsewhere in the UK.

What exactly happened to the rate of property-price growth?

The newspaper stated that the average amount paid for a home in the UK during April was 0.3% higher than it had been the previous month. But with a 1.1% increase having been seen in March, the percentage rise recorded for April is the smallest seen by the building society’s monthly property index since September 2021.

On a year-on-year basis, house prices are 12.1% higher than they were 12 months earlier – a figure that Peak Mortgages and Protection managing director Rhys Schofield said was “still an insane rate of growth”.
The equivalent measure seen for March was 14.3% – so while it is practically undeniable that there has been a slowdown, it must be considered that it is still only a modest one.

Plenty of people are still moving or considering moving
One may have imagined that the increasingly difficult cost-of-living situation for many people might have had an impact on the numbers of them seeking a house move right now. However, Nationwide said that the share of people thinking about a move or actually relocating was higher than seen during April last year, when the pandemic was still raging.

Robert Gardner, chief economist at Nationwide, commented: “The survey results suggest that shifts in housing preferences as a result of the pandemic are continuing to support housing market activity, though to less of an extent than at this time last year.”
About a quarter (24%) of those moving or contemplating a move stated that this was in order to move to a larger property, which was about the same proportion as seen a year earlier. However, declines were seen in the proportions of people expressing a desire to get away from the hustle and bustle of urban life or to gain access to a garden or more outside space; these fell to 12% and 15% respectively, compared to the 25% and 28% seen 12 months ago.

The above suggestions of slowing growth in house prices back up the Office for Budget Responsibility (OBR)’s estimate last October that the rate of house price growth in the UK would slow to 3.2% in 2022, and then further to 0.9% next year.
Whatever your own involvement in the Surrey property market and your potential interest in homes for sale in Weybridge, here at Yooodle, we can be constantly by your side. For answers to any questions you may have, as well as for more direct assistance, please do not hesitate to contact our local office today.