19 October 2022
According to today’s House Price Index by the Office of National Statistics, UK average house prices in August 2022 increased by 13.6% over the year. The figures are slightly skewed due to the changes in the Stamp Duty Land Tax (SDLT) holiday last year, but prices are still £36,000 more than this time last year. The average UK house price is now £296,000, £4,000 more than last month.
Stacy Eden partner at leading audit, tax and consulting firm RSM UK, comments: ‘Property prices in August 2022 suggest that the UK housing market continued to boom in the summer but given the unprecedented challenges presented by the mini-Budget, rising inflation and interest rates, the market is already recognising that nationally house prices may fall 10% over the next year. However, the chronic lack of supply in a number of UK markets has meant that any price correction should be limited.’
He added: ‘Unfortunately first-time buyers and mortgage owners are really feeling the squeeze. The house price to earnings ratio is at an unsustainable level which is making property unaffordable in some areas with the recent severe rise in interest rates. However, the supply and demand equation needs to be high on the government’s agenda as there is still a shortage of new housing stock coming to the market, and freeing up planning regulations as long as continuing to cut stamp duty will be a necessity, as we enter this difficult period.’