UK Property Prices Soar with Record Increase
UK property prices have begun to soar at unprecedented rates – with the highest growth rate since May 2016.
Current asking prices in the UK have risen at a peak annual rate and continue to boom despite some very rocky roads in the past couple of years. These include the end of a temporary tax break last year and an interest-rate increase in December of 2021 – along with mortgage costs nearing an all-time low.
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Rightmove has stated that the price which sellers sought in January was 7.6% higher than a year earlier, at an average £341,019 pounds. That’s the strongest growth rate we’ve seen since May 2016!
What caused UK property prices to increase?
The government has launched a consultation to look at the potential damage that holiday lets may cause in local neighbourhoods, but it’s not just holiday let investment that has led to this sky-high price increase.
The first working week of 2022 was dubbed as “the busiest start of the year ever” for homeowners preparing to sell. Before the pandemic struck, the number of valuation requests were 44% above January 2021 levels, and 48% above January 2020.
In December of 2021, the Bank of England increased base rates from 0.1% to 0.25% after the Monetary Policy Committee (MPC) voted in favour of the first rise in more than three years. But this slight jump appears to have little impact so far.
A separate survey published on Saturday by OnTheMarket found that optimism continues “unabated” with three quarters of buyers confident in making a purchase within the next three months. However, it did warn that “over the coming months, house price growth may start to tail off” as more properties come onto the market and buyers respond to increasing mortgage rates.
Rightmove’s Director of Property Data, Tim Bannister, has said in a statement recently that prices are likely to continue to rise until more choice is available. He also stated that it’s clear the trends which defined the market in 2021 are continuing to carry over into 2022. Rightmove also stated that the leap in average asking prices in January was driven by a record level of expensive homes and properties targeted at first-time buyers.
But don’t worry! With this historically low supply of properties on the market, there’s also a strong demand in place.
Here are some quick points on what you can do now to take action and level up as a landlord.
- Learn as a landlord. Now more than ever, today’s landlords are playing a vital role in housing Britain. Younger landlords are also making the most of their rental income, with the youngest group (aged 18-30) generating on average £25,481 a year. Gain some valuable tips on how you can make a lasting impression as a landlord and set a great example to your tenants by expanding your knowledge.
- Consider your options. The pandemic has affected countless lives due to job losses and business closures, and it could also be a factor in some choosing to buy properties outside of the cities. But the cost of living has also risen exponentially as well. Couple that, along with a severe shortage of properties and it may be time for you to consider your options. Perhaps buying with friends may be a route you’d like to take. Saving a pretty penny by pooling your resources means you’ll have more of a deposit, among other advantages to consider including a bigger size or standard of home. Try using our affordability calculator to see just how much you might be able to borrow should you make a move on this route.
- Get advice. Whether you’re a first time buyer in hopes of landing your dream home, or you’re simply looking for mortgage advice, you can contact us at Mashroom if you’re curious to find out more.