UK house prices rise first time since September in official data


The first rise in UK house prices in seven months was overshadowed by a rapidly darkening outlook for the property market after a surge in bets for higher interest rates.
The average cost of a UK home rose to £286,000 ($363,520) in April, up 0.5% compared to the previous month, the Office for National Statistics (ONS) said.
The figures contrast with more recent readings from mortgage lenders showing that prices are declining, based on loans extended to buyers. The ONS figures reflect prices for completed transactions and lag by several months. There are growing concerns that demand for housing and property prices will soon be dampened by a surge in mortgage rates as investors bet on the Bank of England lifting its key rate to 6% following red-hot inflation data.
Pressure on property prices could add to a growing list of economic headaches for Prime Minister Rishi Sunak, who faces an election by early 2025. Separate figures out showed core inflation at a 31-year high. “April’s rise will prove to be a blip,” said Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, who anticipates an 8% drop in prices from the peak. “House prices have further to fall. The impact of surging mortgage rates will offset any boost to real incomes from the drop in energy bills in the second half of this year.”
Annual house price inflation slowed to 3.5%, its weakest since September 2020. That
figure still beat economists’ expectations of a 2.5% rise. The ONS also said the pressure on renters continued to mount with private rental prices climbing 5% in the 12 months to May, up from 4.8%. It was the fastest since records began in January 2016. London rents rose at their fastest pace since October 2012 as tenants battle for a limited supply of homes in the capital.
“UK rental prices continue to climb reaching another record high in May, with the West Midlands showing the highest annual percentage change in England,” said Aimee North, ONS head of housing market indices. “London’s rental growth also continued to surge seeing its highest annual rate in over a decade.”

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