According to the Office for National Statistics (ONS), this was also a 7.8 per cent annual uplift in prices.
House price growth slowed when compared to May, which recorded a 12.8 per cent yearly rise and a 1.2 per cent monthly uptick. Increases are also muted compared to what was seen during May and June last year, when there was a 5.7 per cent rise in house prices month-on-month.
Within England, house price inflation was strongest in the East of England which posted a 9.7 per cent rise in the year to June 2022. The lowest annual growth was in North East, where prices increased by 3.6 per cent in the 12 months to June.
At the country level, Scotland saw the largest yearly increase in house prices with an 11.6 per cent surge to £192,249. This was followed by Wales where average house prices rose by 8.6 per cent to £213,091 in the year to June, and then England which saw a 7.3 per cent change to £304,867.
ONS tracks house price growth in Northern Ireland quarterly. The latest figures report there was a 9.6 per cent rise in house prices over the year to Q2 to reach £169,063.
House price growth is still steady
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said the slowdown in house prices during June was distorted by the stamp duty holiday last year when prices hit a peak. This was followed by subsequent falls in house prices.
She added: “This is all going to feed into ramshackle results over the next few months, as prices are compared to a year earlier. It means the annual comparison is likely to rise again next month, before dropping in September.
“For a clearer picture it’s worth checking month-on-month figures. These show that prices were up an average of £3,000 between May and June. This is roughly the kind of rise we’d seen for the previous three months, and was more than house price growth at the very start of the year. There hasn’t been a huge change in house price growth in the first half of 2022.”
Potential renegotiation of prices
Chris Hodgkinson, managing director of House Buyer Bureau, said for those who will go ahead with purchases, borrowing costs would rise impacting the price buyers are willing to pay. He said this would “force sellers to lower their expectations when it comes to pricing their home for sale”.
Simon McCulloch, chief commercial and growth officer at Smoove said this could lead to gazundering to reflect decreases in house price valuations.
Paul Neal, mortgage and equity release specialist at Missing Element Mortgage Services, added: “With the cost-of-living crisis really hitting hard, people can no longer afford to be hitting the top of their budgets and the balance of power is shifting back to buyers quite rapidly now.
“Sadly, it will be bad news on both sides, with vendors selling for less and buyers paying less but at higher mortgage rates. If there are any winners, it will be the cash buyers.”
Sector will press on
Clare Beardmore, head of broker and propositions at Legal and General Mortgage Club, said: “While growth is gradually slowing, the housing market is thankfully proving more resilient than we might have hoped. The threat that a recession poses to house prices certainly shouldn’t be overlooked, but the imbalance between housing supply and demand and the UK’s longstanding commitment to homeownership are among the factors counterbalancing this, or at least for the time being.
“Although house price inflation will likely dip in the coming months, this should not alarm anyone. The desire to press ahead in the face of economic headwinds is matched by lenders, advisers, and borrowers.”
