The rate of increase in UK house prices remained steady in June, while tenants are facing soaring rents, new official figures reveal. The Office for National Statistics (ONS) reported that the average price of a home rose by 2.7 percent in the 12 months to June, a figure consistent with May’s data.
This marks the fourth consecutive month of annual price increases, following eight months of declining prices. The average cost of a UK property in June stood at £288,000, with prices in England now £305,000 on average – a 2.4 percent increase from the previous year
Meanwhile, private rents across the country surged by 8.6% in the year to July, averaging at around £1,319 per month, according to ONS estimates. This figure remained unchanged from the year to June, and still below the record-high annual rise of 9.2% recorded in March.
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Nathan Emerson, the CEO of Propertymark, warned renters: “The rental market continues to feel the harsh reality of ongoing pressures on housing demand, which are outstripping current supply.”
He added: “This has a real-world effect on rental prices for consumers and that consequence is prices tend to be pushed further upwards.
“It is crucial the mismatch between supply and demand is addressed as a priority to help ease a current ‘nine applications per available property’ trend that we are witnessing.”
Sarah Coles, Hargreaves Lansdown’s head of personal finance, noted that rent rises remain “eye-watering”, despite the pace of increases slowing.
She said: “Landlords continue to sell up in the face of higher mortgage costs, tougher tax rules and the likelihood of more stringent legislation.
“Meanwhile, growing tenant numbers make it harder to get hold of a property, even if you’re prepared to pay sky-high prices. It’s difficult to see how things will ever get any better.”
On the other hand, Elliott Jordan-Doak, senior UK economist for Pantheon Macroeconomics, pointed out that the continued growth in house prices shows the “resilience of the housing market to high interest rates”.
He concluded: “The outlook for mortgage rates should boost demand in the coming months. The typical two-year fixed-rate mortgage interest rate fell to 5% in July, and will fall to 4.3% by the end of the year if market pricing for MPC (Monetary Policy Committee) rate cuts is right.”
