Annual house price inflation is currently up either by a lot or by a hell of a lot depending, as always, on who you ask. At £32k a year the typical UK house is now earning more than the average occupier.
Office for National Statistics 12.8%
Opinion is split on where prices will go from here – some people will tell you higher interest rates won’t impact house prices because so many current borrowers are on fixed rates. I think they are mistaken. Whilst higher rates won’t lead to forced sellers and a flood of distressed sales for now new borrowers will find that their mortgage will be more expensive and they will make lower offers as a result. These lower offers will show up in the indices as falling prices.
Remember, house price indices record the deals that were done by about 100k sellers every month. They do not reflect the millions of deals that were not done because buyers couldn’t afford to.