According to the Halifax house price index, there was also a 1.8 per cent monthly rise in prices during June making it the 12th month running for price inflation.
Northern Ireland recorded the strongest annual house price growth, up 15.2 per cent to £187,833.
This was followed by Wales, with a yearly price change of 14.3 per cent to £219,281.
Within England, the South West saw the sharpest jump in house prices annually, up 14.2 per cent to £308,128.
While remaining the most expensive region for houses in the UK, London recorded a 7.1 per cent uptick in average prices to £547,031.
No slowdown yet
Russell Galley, managing director at Halifax, said the UK housing market “defied any expectations of a slowdown”.
He added: “House prices have now risen every month over the last year, and are up by 6.8 per cent or £18,849 in cash terms so far in 2022, pushing the typical UK house price to another record high of £294,845.
“The supply-demand imbalance continues to be the reason house prices are rising so sharply. Demand is still strong – though activity levels have slowed to be in line with pre-Covid averages – while the stock of available properties for sale remains extremely low.”
Galley said property prices had been “insulated” from the cost of living squeeze as this was primarily being felt by those on lower incomes who were less likely to be actively buying and selling houses.
He said: “Of course, the housing market will not remain immune from the challenging economic environment. But for now it continues to demonstrate – as it has done over the last couple of years – the unique combination of factors impacting prices.
“In time though increased pressure on household budgets from inflation and higher interest rates should weigh more heavily on the housing market, given the impact this has on affordability.
“So while it may come later than previously anticipated, a slowing of house price growth should still be expected in the months ahead.”
Not a case of if, but when
Imogen Sporle, head of term finance at London-based broker, Finanze, said: “Despite this extraordinary data, it’s not a case of if house prices crash but when.
“Demand in the property market will cool due to painfully high inflation. Inflation is the property market’s nemesis and is hitting sentiment for six. Lenders becoming more conservative with affordability is sensible in the current climate but of course this will mean people can borrow less, which means sellers may soon have to price lower.”
More rises in the near-term
Rhys Schofield, managing director at Belper-based Peak Mortgages and Protection, said: “House prices are still going to be higher by the end of the year, as the data we see now is based on what value house sales were agreed five months ago and that will take time to feed through. Demand is still very much there and the drastic shortage of property stock just keeps driving prices up.
“We still have a shortfall on UK housing stock of about four million properties so until that changes, which seems incredibly unlikely given the track record of successive governments, the inflationary pressure on house prices will not subside.”
Lewis Shaw, founder of Mansfield-based Shaw Financial Services, said Halifax’s recent launch of a 95 per cent loan to value mortgage for new builds meant the lender was willing to increase its exposure, possibly hinting at stronger house price growth to come.
He added: “They must think or know something we don’t, namely house prices aren’t going anywhere anytime soon. This move by one of the best and most well-respected lenders in the UK should give everyone pause for thought. Moreover, it should give added confidence in the property market, mortgage market and the economy more generally.
“To me, this move in itself signals things may just be alright. Also, let’s not forget we are still facing the lowest stock levels since records began, which will continue to support prices.”
Iain McKenzie, CEO of The Guild of Property Professionals, said: “It will surely be only a month or two before we see the price of the average property break through the £300,000 barrier for the first time.
“Growth is being driven by the imbalance between supply and demand, with higher-earning professionals pushing up the price of larger, more expensive, detached homes.
“Who knows when this incredible run of 12 consecutive monthly rises will end, but perhaps it’s not as soon as we thought.”
