Private rental prices in the UK have experienced their sharpest increase since 2016, with a jump of 5.3% in the 12 months leading up to July, according to data from the Office for National Statistics (ONS). This growth surpasses the previous month’s figure of 5.2% and indicates a consistent upward trend over the past two years.
The ONS report also reveals significant regional disparities. Annual private rental prices in England surged by 5.2%, while Wales and Scotland experienced even greater increases of 6.5% and 5.7%, respectively. Within England, the West Midlands, Yorkshire and the Humber, and London saw the highest annual percentage changes in private rental prices, at 5.5%. Conversely, the North East saw the lowest increase at 4.6%.
In contrast to the rental market, the ONS data shows a slowdown in house price growth. House prices in the UK rose by just 1.7% in the 12 months to June, down from the 1.8% increase in May and well below the peak of 14% seen in July of the previous year. Despite this deceleration, the average house price in the UK reached £288,000 ($368,000) in June. The average house price in England increased by 1.9% to $391,000, while in Wales it rose by 0.6% to $272,000. Northern Ireland experienced the largest increase at 2.7%, with the average house price reaching $222,000. In Scotland, house prices remained practically unchanged at an average of $241,000.
Aimee North, the head of housing market indices at the ONS, commented on the figures, stating, “Annual house price inflation, measured using final transaction prices, slowed again in June, but the fall was gentler than we have seen in previous months.”
The British housing market has faced additional challenges recently, as mortgage rates hit a 15-year high in July. The Bank of England implemented a series of interest-rate hikes in order to curb inflation, which subsequently led to a decline in demand for mortgages.
It remains to be seen how the rental and housing markets will develop in the coming months. With rental prices reaching their highest point in years, tenants may face further financial strain. As for the housing market, the slowdown in house price growth could have implications for homeowners and those looking to enter the property market.
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