A Perfect Storm for the UK Housing Market?

There’s a lot going on in the UK housing market at the moment, are you up-to-date?

Property prices remain sky high, houses are being snapped up ‘within hours’ to be used as holiday lets (creating local tensions) and the government has introduced a multi-million-pound finance package to encourage the building of new homes. 

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Let’s break all of that down and take a look at the factors at play and how they might affect UK landlords.

Rising UK house prices

According to the Halifax House Price Index, house prices are the highest they’ve been since 2007. It said that average UK house prices rose for the ninth month in a row in March 2022, up by 1.4% (£3,860 in cash terms). 

This is the biggest increase since September 2021, and means that the annual rate of house price inflation (which is +11.0%) continues to sit at its highest level since mid-2007.

In fact, the new record price is up £28,113 on a year ago which isn’t far off the average UK annual salary from the same period, which was £28,860.

The reasoning behind the jump is limited supply and strong demand – there are too many buyers chasing too few properties. This makes it increasingly difficult for first-time-buyers, but also challenges those wanting to move. Buyers are dealing with the prospect of higher interest rates and a higher cost of living.

If you’re concerned about buying your first home or buying a new home, Mashroom offers free mortgage advice, so book a call today!


Second homeowners ‘killing villages’

Residents of a Yorkshire fishing village have accused second homeowners of pricing them out of the housing market, ramping up existing local tensions between locals and staycationers

The comments from ‘heartbroken’ locals in Robin Hood’s Bay, were reported after tourists bought all but five seaside properties. One resident said:

Most properties have been gobbled up as holiday lets by urban outsiders within hours of being listed.

Residents have accused city-dwelling staycationers of ‘killing’ their community by snapping up properties to use as second homes and holiday lets, while house prices continue to soar. 

Building for the future

Ensuring there are enough affordable homes for everyone is key to solving the crisis. There could be a solution for those worried about being priced out of their hometowns, thanks to a multi-million-pound finance package from the Government’s Levelling Up Home Building Fund and HSBC UK.

Homes England and HSBC UK have announced they will be collaborating to provide funding, which will mean Wyatt Homes can accelerate the delivery of over 1,000 new family homes.

The new multi-million-pound government finance package for new homes means that approximately 30% of these will be affordable. The idea is to address the lack of affordable housing across Dorset, Hampshire and Somerset, which are also hotspots for second homes, creating a crisis in the local communities.

However, these new homes will take some time to build, so if you’re a first-time-buyer looking to get on the housing ladder sooner rather than later, book a call for our free advice today.

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