House prices have been rising for what feels like forever, and the average home now costs some £25,000 more than at this time last year. Are the increases finally coming to an end? We take a look.
The highly competitive property market has been transformed by the stamp duty holiday, not to mention the pandemic, and prices have simply skyrocketed. As reported by Halifax, the average UK home now costs over £47,000 more than in 2020. These increases have, however, have begun to slow and will continue to do so as sellers come back to the market.
If prices are to fall, the market still needs a large number more sellers to list their properties because, according to Propertymark, an average of 84 new buyers per agent registered in March. What’s more, 84% of sold properties achieved a value that was equal to or higher than the initial price tag.
For some time, sellers have entered the market safe in the knowledge that they won’t be disappointed by bids that come in, because they are still greatly outnumbered by buyers. This will not change while the imbalance remains. Although more sellers were recorded in March and April than in January and February, the average time taken to sell a property dropped from 33 days to 30.
Looking ahead to Q3, more small price increases are expected, with 1-3.5% the suggested figures. We could also see a 3% rise in in 2023, but 2% is more likely for the remainder of 2022 given that we have seen an average monthly increase of around 1% so far this year.
For those of you who are wanting to take your first step on the property ladder as first-time buyers, the waiting game may have to come to an end – especially if you’re buying on your own. Millions of young professionals in the UK have already had to renew tenancies or move back home to save for a decent deposit, and decision time is nearly upon those who can just about afford one. Monthly price increases may have gotten smaller of late, but they are still increases. Biting the bullet and paying up now currently looks like a much better option than hoping for increases to stop either this year or next.
With mortgages remaining competitive, interest rates are a big sticking point but, in the grand scheme of things, waiting for them to drop is a more dangerous game than agreeing at the current rate.
If you’re already on the property ladder, capitalising on the biggest buy-to-sale ratio possible is ideal, but be wary of a bidding war starting if you start low. A firm offer that is higher than what you want to pay might end up being cheaper than your final offer in a face-off with another buyer.
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