Daily Mail

Cost of moving crisis could cool housing market

- By Helena Kelly Money Mail Reporter

HOUSE prices rose by £92 a day in May but the market is continuing to show signs of cooling, experts have said.

The average UK property reached a record high of £289,099 last month, according to figures from Halifax.

This was a £2,857 increase compared to April, and marked the 11th consecutiv­e month that prices have gone up. They are now 10.5 per cent higher than the same month last year – but after two years of record price rises, Halifax warned that the rate of growth is slowing.

Russell Galley, managing director at the bank, said: ‘The housing market has begun to show signs of cooling. Mortgage activity has started to come down and, coupled with the inflationa­ry pressures on household budgets, it’s likely that activity will start to slow.’

Northern Ireland saw the highest rate of growth, with the average home now worth £185,386, up 15.2 per cent on the same month last year. London experience­d the slowest rate of growth, but house prices were still 6.3 per cent higher than May last year, the Halifax data showed. Property sales boomed when the first lockdown was lifted in summer 2020, with the Government’s stamp duty holiday helping to fuel sales and price rises.

Families also accrued significan­t savings during successive lockdowns which left many looking for bigger homes and gardens in a so-called ‘race for space’.

However, experts predicted that the cost of living squeeze would trigger a downturn in the market.

Last week the Bank of England said mortgage approvals had fallen to their lowest level since June 2020.

The Bank is also expected to raise interest rates further to keep a lid on spiralling inflation, which would push up mortgage costs and dampen demand.

Research by the Royal Institutio­n of Chartered Surveyors (Rics) revealed that demand from prospectiv­e home buyers had fallen in May. Simon Rubinsohn, chief economist at Rics, said: ‘The increase in the cost of mortgage finance alongside growing concerns about the economic outlook are unsurprisi­ngly having an impact, albeit a relatively modest one at this point, on buyer activity.’

‘Inflationa­ry pressures’

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