Property market ‘defies logic’ as house prices rise 13pc

House prices increased 13pc in the last year, the highest annual growth since 2004, as experts warned the property market was “defying logic”.

Despite a cost-of-living crisis damaging household finances, house prices rose 1.8pc in the month to June in the biggest monthly rise since early 2007, according to lender Halifax. The monthly growth rate was up from 1.2pc in May.

With the average house price now £294,845, Halifax’s Russell Galley said the market had defied any expectations of a slowdown as a result of strong demand from buyers and lack of supply.

Analysts had downgraded their house price forecasts in recent months as successive interest rate rises have brought soaring mortgage costs and fears of a global recession.

However Michael Aldridge, of mortgage advisers Lucra Mortgages, said the housing market had continued to “defy logic” and boomed despite the growing number of “doom and gloom prophecies.”

“Some analysts predicted the property market would be on its knees by now but despite an apparent perfect storm it still remains extremely buoyant,” he said.

Jonathan Hopper, of Garrington Property Finders, a real estate consultant, said there had been a shift in the regions that are gaining in price.

Northern Ireland recorded the strongest house price inflation of any British region or nation, with annual growth of 15.2pc taking the average cost of a home to £187,833, according to Halifax. Prices in Wales also rose faster than the UK average, with growth of 14.3pc to an average house price of £219,281.

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