Halifax warn of housing market slowdown, as insolvencies rise

Halifax reveal record house price growth, but warn of slowdown

Halifax published their house price index for April 2022 this week, reporting that house prices have increased by 1.1% in the month to a record high of £286,079.

The increase marked the tenth consecutive monthly rise; but there were warnings that the rate of house price growth is expected to slow as incomes continue to come under pressure.

The headwinds facing the wider economy cannot be ignored. The house price to income ratio is already at its highest ever level, and with interest rates on the rise and inflation further squeezing household budgets, it remains likely that the rate of house price growth will slow by the end of this year.


Meanwhile, Zoopla have stated that property prices have risen at their fastest rate since 2007, pushing around 4.3 million homes into a higher stamp duty bracket.

Reporting the average house price at £249,700, the property website revealed that Wales continues to see the greatest annual house price increase at 12.1%, as buyers continue to look for homes in rural and coastal areas.

Material woes continue as inflation increases drive insolvencies

The Construction Products Association has downgraded its forecast for industry growth from 4.3% to 2.8%, as global issues begin to affect the housing market.

Whilst demand remains high, and the short-term position continues to be positive, the CPA warned that rising energy prices and war in Ukraine have led to a significant reduction in growth forecast from just three months ago.

Meanwhile, the CPA have reported that manufacturers are refusing to contribute towards fixing building safety defects, claiming that they are instead ‘sticking to their guns’ despite threats of legal action by the Government.

The Royal Institution of Chartered Surveyors has also warned of the impact of material shortages, with their residential market survey for the first quarter of 2022 revealing that 84% of respondents are citing supply issues as a threat to construction activity.

However, the latest statistics from the Timber Trade Federation have reported that timber import volumes have reached pre-pandemic levels, as a slight slow-down in housing volume in the first quarter of 2022 eases pressure on the supply chain.

Rising costs in both labour and materials have contributed towards a 142% increase in construction firms going out of business, say the Insolvency Service, who revealed that there were 307 insolvencies in the industry in February 2022; an increase from 127 insolvencies in the same month last year.

Barratt “on track” for full year results

Volume developer Barratt is on course for a successful year, in a statement made this week which revealed that completions are set to be 4-6% above those for 2021.

In the period covering 1st January to 1st May 2022, the UK’s largest housebuilder said that it had delivered 4,625 home completions and is fully forward sold for FY22.

Barratt also announced that the annual pay rise for employees was being brought forward this year, to help ease the impact of the cost of living crisis.

The increase is in addition to the recent extension of private medical insurance to the organisation’s entire workforce and increased holiday allowances.

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