According to official data, the rate at which UK home prices are increasing has slowed, yet property values were still up 7.8% in the year leading up to June.
The annual increase in the average house price in the United Kingdom dropped from 12.8% in the prior month, according to the Office of National Statistics (ONS).
It reflects substantial increases in demand and prices a year ago, just before the elimination of a tax rebate on stamp duty.
According to the most recent data, Scotland saw the highest increase in home prices.
Compared to England, Wales, and Northern Ireland, property prices increased by 11.6% in Scotland, 7.3% in England, 8.6% in Wales, and 9.6% in Northern Ireland.
Among the English areas, the East saw the greatest increase (9.7%), while the North East saw the least (3.5%).
The housing market will be affected by the rising cost of living and higher interest rates, which will make mortgages more expensive. However, the persistent disparity between the number of properties on the market and the number of prospective buyers is maintaining relatively high prices.
According to the ONS, the average UK property cost £286,000 in June, which is £20,000 more than a year ago.
Sarah Coles, the senior personal finance analyst at investment platform Hargreaves Lansdown, stated, “Right now, price increases are the result of a mismatch between supply and demand and a lack of available real estate.
“However, when the number of buyers declines and the number of sellers increases, this will change. Buyers are also losing confidence, which is crucial.”
The growing cost of living was not the most important factor in the June slowdown in home price growth.
Rather, it was the market a year earlier, when buyers rushed to close to take advantage of stamp duty concessions in England and Northern Ireland.
This caused prices to rise, distorting the comparison with prices a year later relative to the longer-term trend.
