Housepresso 10 July 22
House prices on firmer foundations than the Prime Minister
No doubt Prime Minister Boris Johnson wishes his popularity in parliament was as resilient as house prices are in the face of economic headwinds and cost of living challenges. June 2022 marked the twelve consecutive rise in house prices, and at 13%, delivering the highest annual house price growth rate since late 2004. As house prices continue to defy expectations, we do not expect them to come crashing down in the short or medium-term, and it seems that the Prime Minister's luck ran out before house prices ran out of steam.
Political uncertainty and house prices
Following the rather dramatic events of the last few days and hours we thought it might be helpful to look at what political turmoil does for house prices, and what we find might surprise you…
House prices largely indifferent to political turmoil
In the recent past, we have had several major events to help us assess how house prices may react to the unusual political events of the last few days.
What does the cost of living crisis mean for house prices?
The National Institute of Economic and Social Research (NIESR) recently looked at the impact of the last budget and inflation on household finances, whilst they were not specifically looking at the implications for house prices, we believe that their analysis sheds some light on the strength of house prices at the current time.
Mortgage rates continue to rise in June
As we have commented before with Bank Rate rising it is inevitable that mortgage rates will follow suit. The average mortgage rates for popular mortgage products rose by around 10% in June and mortgage rates are likely to continue rising during the rest of the year.
Twindig Housing Market Index
In a week where few, if any, predicted the fall-out and decimation of the UK Government and the beginning of the end of Boris Johnson's reign as UK Prime Minister, the Twindig Housing Market Index was unchanged this week at 71.6. Time will tell if this was because residential investors had more than housing on their minds or if they were waiting for the political dust to settle before re-assessing the UK housing market. For what it's worth, our view is that this week was a good week for the UK housing market.