The Regional Market

In Q2 2022, Nationwide data showed continued strength in house price growth across all the UK regions. The South West saw the strongest growth of all at 14.7%, up slightly from 14.4% last quarter. All regions, with the exception of London and Scotland, saw growth of 10% or higher. This marks another quarter of pretty remarkable house price growth across the regions, despite the increasing economic headwinds.

The RICS residential survey provides a more forward-looking indicator than measures of house price growth and shows that surveyors in the majority of regions now expect either price falls or flat growth over the next three months. The exceptions are the North and Northern Ireland. This is partly explained by the fact that these were the only two regions where surveyors did not report falling buyer enquiries. With sales instructions picking up across almost all regions it is likely surveyors expect a shift in the supply/demand dynamic, the imbalance of which has been one of the main reasons behind the strong price growth we have continued to see.

On balance we expect that it will not be until the back end of Q3 that we begin to see a significant slowdown in the housing market. The higher value regions such as the South East where affordability is more stretched will be most exposed, although the relaxation of the mortgage affordability test will go someway to mitigating this.