Annual house price growth accelerated to 13.0% in June, according to the latest Halifax House Price Index.

This figure is up from the 10.7% that Halifax reported for May and is now at its highest level since 2004.

House prices increased by 1.8% on a monthly basis in June, which is the twelfth consecutive monthly increase and the biggest monthly rise since early 2007.

These figures mean house prices are up by 6.8% so far in 2022, or £18,849 in cash terms, pushing the average UK house price to another record high of £294,845.

Halifax managing director, Russell Galley, suggested that the “supply-demand imbalance” continues to be the reason house prices are rising so sharply.

“Demand is still strong – though activity levels have slowed to be in line with pre-COVID averages – while the stock of available properties for sale remains extremely low,” Galley said.

“Property prices so far appear to have been largely insulated from the cost of living squeeze. This is partly because, right now, the rise in the cost of living is being felt most by people on lower incomes, who are typically less active in buying and selling houses. In contrast, higher earners are likely to be able to use extra funds saved during the pandemic, with latest industry data showing that mortgage lending has increased by the highest amount since last September.”

Galley also suggested that the housing market will not remain immune from the current economic environment, but highlighted that a “unique combination of factors” will continue to impact prices.

One of these remains the shift in demand towards bigger properties, with average prices for detached houses rising by almost twice the rate of flats over the past year – 13.9% compared to 7.6%.

“In time though, increased pressure on household budgets from inflation and higher interest rates should weigh more heavily on the housing market, given the impact this has on affordability,” Galley added.

“Our latest research found that the strong rise in property prices over the last two years, coupled with much slower wage growth, has already pushed the house price to income ratio up to a record level.

“So while it may come later than previously anticipated, a slowing of house price growth should still be expected in the months ahead.”

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