Housing Market Summary
Quarterly update of housing market activity.
- The first half of 2022 has continued last year’s theme of very strong house price growth across the country. Nationwide recently reported growth of 11.4% in the UK for Q2, down slightly from the 12.6% in Q1. This represents the strongest rate of growth for the first half of a year since before the Global Financial Crisis.
- This puts the current average UK house price (Nationwide) at £270,500 and the average new build price at £295,000. Both of these figures are over 20% higher than the start of the pandemic.
- Having said this, the most recent Nationwide monthly data points to a slowing in price growth with a 0.1% m/m increase in July which followed a similarly small 0.2% m/m in June. On a rolling quarterly basis, house price growth slowed from 2.3% 3m/3m to 1.7% 3m/3m, the weakest since March 2021.
- Transaction volumes have normalised from the very high levels we have seen over the last two years. The most recent figure of 95,000 in June is back in-line with the average monthly figure pre-Covid (2019). In 2021, transaction levels were the highest we have seen since the Global Financial Crisis and 25% above the 2019 total.
- It has been our view that the deteriorating economic environment would lead to a slowing in house price growth this year. This has taken longer than expected but we still expect a meaningful slowdown later in Q3 and certainly in Q4.