House prices nudge to a new record in January

The Halifax released its house price index for January 2022 today

What they said

Average UK house prices £276,759 a record high

Annual house price inflation 9.7%

Monthly increase slows to 0.3%

Twindig Take

House prices had a sluggish start to 2022 rising just 0.3% to £276,759 in January 2022 which came off the back of four consecutive rises above 1%. The Halifax believes it is likely that the rate of house price growth will slow considerably over the next year as the cost of living rises and mortgage rate hikes start to bite.

In our view, house prices are finely balanced. On the one hand, we agree that rising living costs and mortgage rates will temper house price growth, but on the other hand, supply shortages continue to underpin and put upward pressure on house prices.

Deposits will be key to the level of house price inflation this year. Those with a big deposit will be able to rise above the living and mortgage cost rises, those without will not and unfortunately, the deposit poor will also find it harder to save as living costs rise. 2022 will once again shine alight on the fact that house prices have become divorced from earnings and that the wealth of your family is a better determinant of your ability to own your home than the size of your wage packet. The simple fact is, we need to change the way we buy houses to level up the housing market and we believe that fractional ownership is the answer to the housing affordability problem.