The latest UK House Price Index for June 2022 from the Office for National Statistics (ONS) shows that the average UK house price increased by 7.8 per cent to £286,000 in the year to June 2022, down from a 12.8 per cent increase in the year to May 2022.
The annual house price inflation has slowed due to tax break changes in June 2021 which inflated prices during a volatile period in the housing market.
Elaine Shiels, tax partner at RSM UK, comments: ‘The latest ONS statistics show that despite the rise in property prices, as widely predicted, the monthly growth between May and June 2022 is at a slower rate, which coupled with the slowdown in annual house price inflation, indicates that the housing market is starting to stabilise. There is still a substantial difference in the average prices across the four countries of the UK, with England having the highest average of £305,000 and Northern Ireland remaining the most affordable at £169,000, however interestingly England’s prices are increasing at the slowest rate.’
She added: ‘A further increase in the average cost of property in the UK clearly shows that balancing supply and demand needs to be high on the government’s agenda as there is still a shortage of new housing coming to the market post-pandemic. With the new Conservative leader being announced in early September, addressing the housing shortage is of key importance, particularly the need for significant tax and planning reform to allow more first-time buyers to get on the housing ladder.
‘With rising interest rates, mortgages becoming more expensive, inflation hitting a 40-year high at 10.1 per cent, and the cost-of-living crisis in full swing, we may see the end of the continual price increases in the property market.’