House price growth has begun to slow down, which will come as a relief to homebuyers who have been waiting for the property bubble to burst.
Halifax recently released its House Price Index, which showed that values rose by 0.4 per cent in August. Although this is still a rise in prices, it follows a drop of 0.1 per cent in July, and is far lower than the growth rates seen earlier this year.
Indeed, property values rose by 1.5 per cent in May, 1.2 per cent in April, 1.2 per cent in May and 1.4 per cent in June, deterring many from purchasing their dream property, fearful that prices will continue to rise at such an unprecedented rate.
Kim Kinnaird, director of Halifax Mortgages, said this “relatively modest” increase in August suggests a “slowdown in market activity” finally.
She noted that experts have predicted house price growth will cool, due to the cost-of-living crisis and the energy cap increase.
“This is likely to constrain the amounts that prospective homebuyers can afford to borrow, on top of the adverse impact of higher energy prices on the wider economy,” Ms Kinnaird stated.
The Centre for Economic and Business Research has predicted that house prices will fall by as much as 4.5 per cent in 2023, due to an increase in mortgage rates, cost-of-living pressures, rising unemployment and a possible recession.
Despite this, house prices have grown considerably over the last year, with the average cost of a home in the UK having increased from £263,955 in August 2021 to £294,260 in August 2022.
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