House Prices – Latest News – Forbes Advisor UK

What’s the latest information on house prices? We monitor the leading indicators to keep you regularly updated about key movements in the UK’s property market

18 July: Rightmove Revises 2022 Forecast Upwards As Prices Continue To Soar

• Annual growth forecast now 7%, up from 5%
• Asking prices in June at new record of £369,968
• Rising costs will cool market in second half of 2022

Rightmove has revised its full-year 2022 house price forecast from 5% to 7% growth, as monthly values climbed for the sixth consecutive month.

Asking prices in June were 0.4% – or £1,354 – higher than the previous month, taking them to new record levels of £369,968, according to the property portal’s latest house price index.

Despite a cooling market – with buyer demand down 7% compared to June 2021 – the relentless price increases are largely being underpinned by record low volumes of homes for sale.

And while buyer demand is down on last year, it is still far exceeding ‘normal’ levels, said Rightmove, at 26% higher than ‘frenzied’ pre-Covid June 2019. Conversely, available homes for sale are 40% down compared to that period.

It is this slow rate of ‘stock recovery’ which has led the UK’s largest property portal to revise its growth forecasts for 2022 upwards from 5% to 7%.

There are indicators however, that a more balanced market could be on the horizon with a 13% increase of sellers recorded in June this year compared to 12 months ago, while demand for homes is likely to tail off in the face of rising living costs.

For this reason, Rightmove’s annual growth forecast at 7%, is lower than 9.3% it’s currently running at.

Those buying for the first time without the benefit of equity rises in an existing home, face a double-whammy of record prices and rising interest rates. Rightmove calculates that mortgage payments are now 20% (or £163) higher every month in June compared to the start of the year.

Economic and political uncertainty is prompting buyers across the board to lock in their mortgage rates for the longer term – especially as there is no longer a discernible difference in cost.

Tim Bannister, director of property science at Rightmove, pointed out that the average interest rate on a 75% loan-to-value fixed rate mortgage is now 2.9%, regardless of whether it’s on a two- or five-year term.

He said: “The challenges presented by rising interest rates and the cost of living will no doubt have an effect throughout the second half of the year, as some people reconsider what they can afford.

“However, there is also anticipation among would-be home-movers that personal finances may become even more stretched in the coming months, with further interest rate rises expected and the energy price cap jumping again in October.

“Given the political and economic uncertainty, those who want to move this year, particularly first-time buyers, may seek some financial certainty by locking in longer fixed-rate mortgage terms now before their monthly outgoings increase again.”

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14 July: Rents Record Biggest Annual Rise In 16 Years

• Average monthly rent £1,126
• Rents up 11.8% in year to June
• Annual growth fastest in London

The average cost of renting a home in the UK (outside London) increased by 3.5% in the second quarter of the year compared to the first quarter, writes Bethany Garner.

Annually, the cost of rent was 11.8% higher in June 2022 than 12 months ago, according to data from Rightmove, which analysed 332,460 rent charges. Inflation in the UK currently stands at 9.1%.

The figures mark the highest annual increase the property website has recorded in 16 years.

The average monthly cost of renting stood at a record £1,126 in the second quarter of the year, while in Greater London this figure was £2,257. 

Annual rental growth in the capital, at 15.8%, was the highest ever annual rise of any region.

By the end of the year, Rightmove predicts average asking rent growth to reach 8%, revised upwards from the 5% it predicted at the start of the year.

Driving the sharp increases is a shortage of available properties and high tenant demand. The number of available rental properties has fallen by 26% year-on-year, while demand is up 6%.

Tim Bannister, director of property science at Rightmove, said: “The story of the rental market continues to be one of high tenant demand but not enough available homes to meet that demand.

“While stock levels are beginning to improve, with June seeing the highest number of new rental listings coming to market so far this year, the wide gap that has been created between supply and demand over the last two years will take time to narrow. Until then, this imbalance will continue to support asking rent growth.”

This gap between supply and demand is beginning to show signs of narrowing — albeit slowly — with the number of available rental properties rising 8% in the year to June. 

Rightmove also found that 34% of landlords are planning to expand their property portfolio over the next 12 months.

7 July: Halifax Reports Record Average Property Price

• Average property worth record £294,845
• Prices up 13% in year to June 
• Annual growth strongest in Northern Ireland

The average UK property rose in price by 13% to a record £294,845 in the year to June 2022, according to the latest property market data from Halifax, part of the Lloyds banking group, writes Andrew Michael.

The company said the annual growth figure is the highest since 2004 and described the UK housing market as defying “any expectations of a slowdown”.

It added that house prices jumped by 1.8% in June this year, the 12th monthly price rise in a row, and the largest month-on-month increase in 15 years.

Regionally, the largest annual rises in June were recorded in Northern Ireland where the average property price increased by 15.2% to £187,833. This was followed by Wales, where prices now stand at £219,281, a rise of 14.3%.

The South West was England’s strongest performer with average properties worth £308,128, a hike of 14.2% on the year.  

The latest house price figures are set against a backdrop of rising UK interest rates and steepling inflation – currently at 9.1% and expected to climb higher – plus a wider cost-of-living crisis raising fears of recession.

Russell Galley, Halifax managing director, blamed the UK’s current supply-demand imbalance as the continued reason behind the nation’s surging house prices: “Demand is still strong, though activity levels have slowed to be in line with pre-Covid averages, while the stock of available properties for sale remains extremely low.”

Nicky Stevenson, managing director of national estate agents Fine & Country, said: “We are seeing house price growth continue to spike even as the UK economy edges closer to recession. The slowdown predicted by so many has yet to materialise in any real sense, despite an increase in borrowing costs and a squeeze on household incomes.

“Existing homeowners continue to make huge gains with competition among buyers still at fever pitch. While a more aggressive tightening of monetary policy is anticipated later in the year, the cooling effect is likely to be gradual given the acute shortage of housing stock which persists right around the country.”

1 July: Zoopla Sees Lowest Monthly Price Growth Since 2019

• Average prices in May at £251,550
• Year-on-year growth drops to 8.4%
• Wales sees highest annual growth of 11.4%

The price of an average UK home rose by 8.4% in the 12 months to May 2022, according to Zoopla’s latest house price index, out today. This is down on the April figure of 9.2%.

A typical UK property now costs £251,550, which is just 0.1% higher than April’s average. This represents the lowest monthly growth rate recorded by the property portal since December 2019. 

It says demand for homes is 40% higher than the UK’s five-year average, but is beginning to fall to typical levels. 

Gráinne Gilmore, head of research at Zoopla, said: “There are many factors supporting the price growth seen since the start of the pandemic, not least the continued imbalance between demand and supply, but the increasing cost of living, increasing mortgage rates for buyers and cloudier economic outlook will act as a brake on house price growth through the rest of the year.”

Wales leads price growth

Wales has experienced steeper price growth than any other UK region, with the cost of a typical home rising 11.4% year-on-year. The average house in Wales now costs £192,500, an increase of £32,000 compared with 24 months ago. 

London has seen the slowest growth, with an annual price rise of just 3.9%. However, London remains the most expensive region overall, with an average home costing £516,100. 

Of UK cities, Nottingham experienced the steepest year-on-year house price growth (10.4%) Zoopla found, followed closely by Bournemouth (10.2%). 

Edinburgh underwent the smallest year-on-year price increase, outside London, of 4.3%, while Aberdeen was the only UK city where average house prices have dropped year-on-year, by 2.5%.

Rising mortgage rates

Zoopla suggests market growth is trailing off in part due to the increasing cost of mortgages. Following the Bank of England’s decision to increase its base rate, mortgage rates have risen in turn. 

For a £250,000 mortgage with a 25% deposit, buyers can now expect an average rate of 3.37% on a five year fixed-rate loan, compared with the 2.64% average seen in December 2021. In practice, this equates to an extra £870 in annual mortgage payments.

Nick Leeming, chairman of estate agent Jackson-Stops, said: “The slower pace of growth overall is a sign that economic headwinds are coming down the tracks.

“What we are seeing is more supply coming to the market in most regions, partly in the belief that house prices are peaking, but also to lock in the best mortgage based on a 25% deposit and an average-price home.”

With the base rate expected to rise further in 2022, Ms Gilmore says buyers should avoid delaying their purchase: “Those who want to make a move should investigate their options sooner rather than later. Mortgage rates are likely to continue to climb, so locking into a rate shortly could save hundreds (of pounds) over the long-term.”

30 June: Price Growth Still Double Digit, Pace Begins To Slow

• Average property worth £271,613
• Prices up 10.7% in year to June 
• Annual growth strongest in South West

Average UK house prices grew by 0.3% in June, marking the 11th consecutive monthly increase recorded by Nationwide. Year-on-year, the cost of a typical UK home has increased by 10.7%.

Although prices continue to rise, growth is slowing down. In May, prices grew by 0.9%, and year-on-year growth stood at 11.2%.

Robert Gardner, chief economist at Nationwide, said: “The price of a typical UK home climbed to a new record high of £271,613, with average prices increasing by over £26,000 in the past year.

“There are tentative signs of a slowdown, with the number of mortgages approved for house purchases falling back towards pre-pandemic levels in April and surveyors reporting some softening in new buyer enquiries. 

“Nevertheless, the housing market has retained a surprising amount of momentum given the mounting pressure on household budgets from high inflation.”

Regional differences

South West England has overtaken Wales as the UK region with the strongest annual price growth. 

House prices in the South West have grown 14.7% year-on-year, closely followed by East Anglia, where the average price has risen by 14.2% in the last 12 months.

In Wales, year-on-year growth stands at 13.4% – a 1.9% drop compared with the first quarter of 2022. 

House prices in London grew by 6% year-on-year, down from 7.4% recorded in the first quarter of 2022.

Mr Gardner said: “These trends may reflect a shift in housing preferences. Our housing market surveys have pointed to the majority of people looking to move to less urban areas.”

In Scotland, too, house prices are growing at a rate below the UK average. The price of a typical home in Scotland has risen by a comparatively low 9.5% year-on-year. 

House prices in Northern Ireland have grown by 11% year-on-year – similar to the growth experienced last quarter.

Downward drift

Commenting on Nationwide’s latest figures Nicky Stevenson, managing director of estate agent Fine & Country said: “House price growth continues to drift downward in response to mounting pressures in the broader economy.

“Increased borrowing costs have come at a time when disposable incomes are already shrinking and the UK is edging closer to recession. These pressures are bound to stretch affordability in the months ahead with inflation still to peak and more aggressive monetary tightening now being signalled by the Bank of England.”

Lawrence Bowles, director of research at Savills, expects house price growth to keep slowing down: “As the Bank of England warns it may hike the base rate by 0.5% in August, the outlook for the rest of the year becomes ever more contingent on mortgage costs.

“We predict that rising rates and an evening-out of supply and demand mean we’ll see price growth ease back to 7.5% by the end of this year.”

25 June: Halifax Sees UK Home Affordability Slump To Record Low

Buying a home is more difficult than ever, thanks to rapidly-rising property prices continuing to outstrip average earnings, says mortgage lender Halifax.

According to its monthly house price index, a typical home now costs 7.1 times the average income of a full-time worker in the UK. This marks the highest house price-to-earnings ratio since Halifax – once the world’s largest building society, now part of Bank of Scotland – began collecting data in 1983.

Homes have become less affordable even since 2020, when a typical home cost 6.1 times average salary.

That’s because, between the start of 2020 and the first quarter of 2022, average house prices rose by 16.8% compared to a 2.7% average growth in income, the research found.

The average cost of a UK home in the first quarter of this year stood at £279,431, while earnings for a full-time employee stood at £39,402.

Andrew Asaam, mortgages director at Halifax, says he expects the trend to reverse: “With interest rates on the rise as a means of combatting inflation, it’s unlikely house prices will continue to grow at the pace we’ve seen recently. This should see the gap between average earnings and property prices narrowing over time.”

Increase in first-time buyers

Despite low levels of affordability, the UK housing market has been highly active in the last 18 months. Last year, more than 409,370 first-time buyers purchased a home – a 35% increase compared to 2020 and a record high, said Halifax.

Mr Asaam added: “There’s no question that the economics of buying a home have changed significantly over the last couple of years. Soaring property prices and slower wage growth have combined to stretch traditional measures of housing affordability. 

“However, we also know from strong transaction levels that demand has remained extremely strong over that period.”

Most and least affordable areas

According to Halifax analysis, homes in London remain the least affordable in the UK, costing 9.7 times what the average Londoner earns in a year. Homes in the South East of England were only slightly more affordable, at a price-to-earnings ratio of 9.3.

Source: Halifax 

Homes in Northern Ireland and Scotland were found to be the most affordable, costing 5.1 times the average regional salary.

Homes are most affordable in Scotland’s Inverclyde, where average property costs just 3.1 times what locals typically earn.

The region with the biggest drop in affordability between 2020 and 2022 was Pembrokeshire. In the first quarter of 2022, the area’s price-to-earnings ratio stood at 6.9, compared with 4.3 at the beginning of 2020. 

Halifax suggests increased demand for rural homes is the main driver for this change.

Despite having the least affordable homes in the UK overall, Westminster and the City of London have experienced the greatest improvement in affordability since the start of 2020. 

The average home in these districts now costs 14.5 times the local annual income, compared with 16.8 times at the start of the pandemic. 

22 June: ONS Reports 12.4% Rise In Property Prices 

• Average UK property worth £281,161
• Prices up 12.4% in year to April 2022
• Annual growth highest in Wales and Scotland at 16.2%

Today’s house price data from the Office of National Statistics (ONS) shows property prices continuing to rise, with a 1.1% increase in March alone and a higher-than-expected 12.4% leap in the year to April.

Kevin Roberts, director at Legal & General Mortgage Club, said: “Even following last year’s frenetic levels of activity, it is clear to see that the UK housing market hasn’t yet run out of steam, even if there are signs that momentum is starting to stabilise.”

The annual increase in property prices had previously slowed from 11.3% in the year to February 2022 to 9.8% in March. 

In terms of regional variations, England experienced an annual increase of 11.9% compared to 16.2% for both Wales and Scotland. However, average house prices remain higher in England at £299,249 compared to £211,990 in Wales and £187,954 in Scotland.

The South-West posted the highest yearly price increase in England of 14.1%, followed by 13.3% in the North West. 

London continued to experience the lowest annual growth of 7.9%, while the East Midlands and the South East saw monthly price falls of 0.5% and 0.3% respectively in March.

House prices increased by 15% for detached properties, compared to 8% for flats.

This report is likely to put further pressure on prospective house buyers who are already facing higher interest rates and inflationary increases in everyday spending.

However, the property market is expected to start to cool over the coming months. Lawrence Bowles, director of research at Savills, forecasts “average values to rise by a total of 7.5% in 2022, as affordability pressures are expected to substantially moderate further price growth for the remainder of this year.” 

But he also warns that the “news that the Bank of England will remove current affordability testing from August could mitigate some of the impact of higher interest rates, and, in theory, could open a little more capacity for house price growth beyond this year.”

The next ONS house price report is due on 20 July.

20 June: Rightmove Reports Record Average Property Price

• Average UK property worth record £368,814
• Prices rose 9.7% in year to June 2022
• Annual growth strongest in Wales at 15.3%

The average UK property rose in price by 9.7% to a record £368,814 in the year to June 2022, according to the latest house price index from Rightmove.

The property portal says average prices grew by 0.3%, or £1,113, in June, the fifth consecutive month that UK property values have increased.

But Rightmove added that the latest increase was the smallest since January this year and predicted that affordability constraints – caused by a growing cost-of-living crisis, rising interest rates and strong inflationary headwinds – will have a greater influence on market behaviour in the coming months.

The company says the prevailing economic climate, coupled with more properties coming onto the market, would likely lead to several month-on-month price falls during the second half of the year.

Rightmove predicted that annual house price growth by the end of the year would stand at about 5%.

Last week, the Bank of England raised interest rates to 1.25% in a bid to stave off runaway UK inflation. Consumer prices rose by 9% in the year to April 2022 and the expectation is that this figure will continue to increase in the coming months before levelling-off in 2023.

Rightmove is warning that a “conveyancing log-jam” means those looking to move this year would need to act soon. It is currently taking 150 days on average to complete a purchase after agreeing a sale, 50 days longer compared with the same period in 2019.

At a regional level Wales, with a figure of 15.3%, recorded the strongest annual house price growth to June. Next came the South West of England (12.9%), followed by the East Midlands (12.5%), and the West Midlands (11.5%). The slowest growth over the past 12 months was recorded in London (4.9%).

Rightmove’s Tim Bannister said: “The exceptional pace of the market is easing a little, as demand gradually normalises and price rises begin to slow, which is very much to be expected given the many record-breaking numbers over the past two years.

“Entering the second half of the year, we anticipate some further slowdown in the pace of price rises, particularly given the worsening affordability challenges that people are facing.”

16 June: Renters Reform Bill To End No-Fault Evictions

The government will today (16 June) publish its Renters Reform Bill, which is set to offer greater protection to residents in England’s 4.4 million privately rented households. 

The bill was first proposed in April 2019, but delayed due to the impact of coronavirus on the housing sector. Separate rules apply in the other UK nations.

The White Paper introducing the Bill promises greater protection for private tenants in England including:

• An end to no-fault evictions

No-fault evictions allow landlords in England to evict tenants without reason, with as little as eight weeks’ notice.

According to housing charity Shelter, over 200,000 private renters in England were served a no-fault eviction notice between April 2019 and April 2022. 

The Bill will bring this practice to an end, meaning landlords in England cannot evict their tenants without a legitimate reason.

No-fault evictions were banned in Scotland in 2017.

• Renting to families and benefits recipients

Private landlords will no longer be able to refuse to rent to families, or people who receive benefits. 

They must in future consider all applications, and cannot place a blanket ban on applicants receiving benefits. 

• Expanding the Decent Homes Standard

The set of standards that rented social housing must meet — the Decent Homes Standard — will be extended to private sector rented homes. 

These will all have to be in a good state of repair, be free from serious health and safety hazards, and have clean and appropriate facilities. 

The government will also explore the possibility of introducing a landlord register, similar to the register in Scotland. 

This would help local authorities keep track of landlords operating in the area to help uphold housing standards. 

Private tenants will be able to request to keep a pet in their home. Landlords will be legally required to consider the request, and cannot refuse without a good reason. 

All private tenants are set to be moved onto a periodic tenancy – often referred to as a ‘rolling contract’.

This means the tenancy is automatically renewed at the end of a defined period, unless the tenant decides to end it, or the landlord ends it for a valid reason. 

Polly Neate, chief executive of Shelter, said: “The Bill is a gamechanger for England’s 11 million private renters. Scrapping unfair evictions will level the playing field. For the first time in a long time, tenants will be able to stand up to bad behaviour instead of living in fear.”

June 14: Cost Of Renting Soars To Record High

Average rental costs in the UK reached an all-time high in May, standing at £1,103 per calendar month. The figure is 1.1% higher than in April and 10.6% up on this time last year.

The figures are from the latest Rental Index from Homelet, which uses data on ‘achieved rents’ for recently-agreed tenancies in the private rented sector.

It found that every region in the UK has seen annual rental growth, while every region with the exception of the North East (where rents fell in May by 0.7%) has seen monthly rental growth.

In London, average rents in May stood at £1,832 per calendar month – an increase of 1.6% compared to April and a staggering 15.7% up on last year.

The capital was the region with the highest annual rental growth.When London is stripped out of the UK average, rents stand at a typical £928 a month – still a rise of 0.9% compared to April, and 8.7% higher than 12 months ago.

Northern Ireland saw the largest monthly rise, with rents 1.7% up in May on the previous month to an average cost of £733.

Commenting on the latest figures, Mike Dawson sales director at Homelet, said: “With continued universal pressure on households, we’ve been seeing tenants stay in properties for more extended periods.

“However, as the summer months approach – when we tend to see the highest volumes of new tenancies – average rents for new tenancy agreements will continue on an upward trajectory. ”

Just over 4.4 million households live in the private rented sector in England, according to the most recent English Housing Market Survey, accounting for around 19% of all households. A further 4 million (17% of households) live in the social rented sector while 15.4 million (around 65%) own the home they live in.

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Trussle is a 5-star Trustpilot rated online mortgage adviser that can help you find the right mortgage – and do all the hard work with the lender to secure it. *Your home may be repossessed if you do not keep up repayments on your mortgage.

9 June: Govt Extends Right To Buy To Housing Association Tenants

Prime Minister Boris Johnson today announced plans to expand the government’s Right to Buy scheme to enable housing association tenants to purchase their home. 

This will extend the scheme, under which council house tenants can buy their property, to an additional two million people. 

Mr Johnson has proposed that housing benefits could be counted as income for would-be buyers when applying for a mortgage.

Commenting on the change a spokesperson from Santander, one of the UK’s biggest mortgage providers, said: “We welcome any initiative that will support more people in buying their own home. As a responsible lender, we will be looking at the proposals to understand the detail and the impact on affordability.”

Changes may also be made to housing benefit rules so that recipients could build up savings for a deposit via a Lifetime ISA or Help to Buy ISA. At present, those with more than £16,000 in savings are not eligible for housing benefit.

The Centre for Policy Research (CPR), a right-of-centre political think tank, welcomed the move. Robert Colvile, director of the CPR, said: “The government’s commitment to home ownership, and the Right to Buy, is hugely welcome. However, we also urge the Government to go further in boosting ownership among tenants of all tenures.”

Labour’s shadow levelling up secretary, Lisa Nandy, says the Right to Buy plans could worsen the housing crisis by removing affordable rented housing from the UK market.

Polly Neate, chief executive of the housing charity Shelter, commented: “Hatching reckless plans to extend Right to Buy will put our rapidly shrinking supply of social homes at even greater risk.”

The government says this risk would be mitigated by setting a cap on the number of housing association properties that can be sold, while committing to replacing each home sold.

When the Right to Buy scheme was first introduced in 1980, around 4.5 million council house tenants purchased their home. In the period from 2020 to 2021, however, just 9,319 social tenants made use of the scheme. 

By extending the policy to housing association tenants, the government hopes to increase home ownership rates. According to a 2021 Ipsos Mori poll, 81% of people want to own their own home rather than rent.

8 June: Lack Of Homes Props Up Slowing Market – Halifax

• Prices increased by 1% in May – the 11th consecutive monthly rise
• Annual inflation slows to 10.5%
• Average property in May worth a record £289,099
• House prices increase 74% in 10 years

Average house prices grew by 1% in May – or £2,857 – representing the 11th consecutive monthly rise, according to the latest house price report from Halifax.

The annual rate of inflation remained in double digits at 10.5%, although this marked the lowest rise since the start of the year.

Average house prices now stand at a fresh all-time high of £289,099, said the UK’s largest mortgage lender and in the last decade have climbed by a staggering 74% (or £123,016).

Despite mounting cost of living pressures, the imbalance between supply and demand for homes is the main driver behind the continued climb in property prices. 

However, according to Russell Galley, chief economist at Halifax, the impact of this varies according to the type of home that house hunters are searching for: “Compared to May last year, you’d need around £10,000 more to buy a flat, but an additional £50,000 for a detached home,” he said.

Regional splits for house price inflation

The biggest annual rises in May were recorded in Northern Ireland where the value of an average property increased by 15.2% to a current £185,386. 

The South West of England also recorded a strong rate of annual growth at 14.5%, with an average property costing £305,173. Wales posted rises of 13.7%, taking typical values to £216,120. 

Annual growth was slowest in London at 6.3%, yet the cost of a home in the capital still stands at a heady £541,942 on average. 

In Scotland, growth was also slower relative to the rest of the UK, with annual inflation at 8.3%. A home in the country now costs an average £198,288. 

Further evidence of a cooling market

Reflecting other recent house price reports, Halifax’s house price index for May shows signs of a cooling market, due largely to mounting inflationary pressures feeding into reduced mortgage activity.

Amanda Aumonier, head of mortgage operations at broker Trussle, said of today’s report: “The current economic backdrop is extremely challenging, and households have already taken the brunt of soaring inflation and an unprecedented increase in the cost of living. 

“An increase in interest rates by the Bank of England has already added over £1,000 to mortgages this year and with the BoE’s target to increase interest rates to 2% by the end of the year, homeowners should expect to be paying much higher monthly payments.

She added that, for this reason, homeowners may want to look to find certainty where they can. “Long-term mortgage deals are very competitive at the moment. There is just 0.45% interest separating a 2-year fix from a 10-year fix. And with interest rate hikes all but a certainty, buyers might want to think long term when selecting their mortgage deals.”

1 June: Double-Digit House Price Growth, But Market Set To Slow

• Annual house prices up 11.2% in May
• Rate of annual growth slower than last month
• Average UK home costs £269,914 – 6.9 times average earnings

House price increases in May remained firmly in double digits with average values 11.2% higher than 12 months ago. However, in further evidence of a cooling market, the figure was down on April’s 12.1%, according to the latest house price data from Nationwide.

On a monthly basis however, seasonally-adjusted prices were 0.9% higher in May than April – a bigger rise than the 0.4% recorded between April and March, said the UK’s largest building society.

Following 10 consecutive monthly rises, the average cost of a UK property now stands at £269,914.

Robert Gardner, chief economist at Nationwide, said: “Despite growing headwinds from the squeeze on household budgets due to high inflation and a steady increase in borrowing costs, the housing market has retained a surprising amount of momentum.

“Demand is being supported by strong labour market conditions, where the unemployment rate has fallen towards 50-year lows, with the number of job vacancies at a record high. At the same time, the stock of homes on the market has remained low, keeping upward pressure on house prices.”

Mr Gardner said he expected the housing market to slow as the year unfolds with household finances likely to remain under pressure and inflation – which stood at 9% in the 12 months to April – set to reach double digits if the cost of energy remains high.

He added that measures of consumer confidence have already fallen towards ‘record lows’, while interest rates are widely expected to rise further, feeding through to the cost of mortgages. Bank rate is currently at 1%, having risen from 0.1% since the end of last year, with the next decision scheduled for 16 June.

Housing market in 1952

To mark the Queen’s Platinum Jubilee, Nationwide also illustrated the stark differences in the housing market between today and 70 years ago when the lender also began to produce its first house price data.

Mr Gardner said that, “the housing market was very different back in 1952, with just 32% of households owning their own home, compared to 65% today.”

He added that in 1952, the UK average house price was £1,891 (around £62,000 in today’s money) which was around four times’ average earnings. Today, the average property costs £269,914, according to Nationwide’s latest figures, around 6.9 times average earnings – a record high.

However, borrowing costs were higher back then, says Mr Gardner, with Bank Rate at 4%, compared to 1% currently.

Free Mortgage Advice

Trussle is a 5-star Trustpilot rated online mortgage adviser that can help you find the right mortgage – and do all the hard work with the lender to secure it. *Your home may be repossessed if you do not keep up repayments on your mortgage.

30 May: April Property Market Still Hot But Clear Signs Of Cooling, Says Zoopla

• Average house prices in April top £250,000
• Annual rises slow to 8.4% from 9% in March
• Time to sell increasing as demand cools

Average property prices exceeded £250,000 for the first time in April, according to the latest report from Zoopla – but the market is reaching a ‘natural ceiling’ as pandemic-fuelled rocketing house prices begin to cool. 

Data from the property portal showed that average house prices in April hit £250,200, marking an annual inflation rate of 8.4% compared to 9% in March. And Zoopla forecasts that annual house price inflation will fall to +3% by the end of the year.

More than one-in-20 homes had its asking price slashed in April by an average of 9% or £22,500 – the widest discount margin seen for the last 18 months – while properties for sale are remaining on the market for longer. 

The average time a three-bedroom property is taking to sell increased to 18 days in April, up from 16 days in March. In London the increase was greater – from 17 days to 21 days.

Gráinne Gilmore, head of research at Zoopla said that, while current high levels of buyer demand is causing the market to move quickly, selling times will steadily increase as demand levels start to fall due to “changing sentiment around the cost of living and personal finances.”

The property market remains strongest in Wales in April for the 15th consecutive month, with house prices 11.6% up on last year, while annual growth in London is slowest at 3.6%, according to Zoopla, which bases its data on a combination of sold prices, mortgage valuations and agreed sales.

The cost of monthly mortgage repayments on a typical UK home (for a new mortgage deal) has risen by £71 a month to £852, since the start of the pandemic (April 2020) squeezing households already impacted by the cost of living crisis.

25 May: More Than A Quarter Of Lockdown Movers Regret Their Relocation

More than a quarter (27%) of people who moved during the pandemic in a bid for more green space now regret their decision, according to a recent survey by our online mortgage broker partner, Trussle.

During the UK’s lengthy Covid lockdowns, waves of urban dwellers opted to move to more rural areas, spurred on by opportunities to work remotely. 

But, two years on, 12% of the 2,000 movers surveyed by Trussle in May believed they rushed into the decision and a further 15% are considering moving again. 

Just under a third of homemovers (30%) believe moving in the last two years was definitely the right decision, while a further 18% said they are happy with the move but it’s taking longer than expected to adjust. 

Amanda Aumonier, head of mortgage operations at Trussle, commented: “There is no doubt that Covid-19 shifted homeowner priorities and, with the return to the office and normal life very much underway, it is understandable that many people are feeling unsure of their decisions.”

But Ms Aumonier also cautioned those who regret their move against charging into another: “Homeowners who are looking to buy should do so with caution as, with the market expected to slow, there is a real possibility of negative equity in the years to come. 

“Alongside this, the costs of moving properties should not be understated, especially at a time when household expenses are already stretched.”

The Trussle survey revealed that 24% of homeowners are considering remortgaging their property instead to fund home upgrades. This number has doubled over the last two years.

About a third (33%) of homeowners who planned to carry out home improvements intend to fit a new kitchen, making it the most popular form of improvement.

A further 28% planned to upgrade their bathroom, and 24% want to landscape the garden. 

It is unsurprising to see outdoor improvements so high on homeowners’ list of priorities, since 76% of adults surveyed by Trussle prioritise having a garden over access to a rail station or other public transport. 

The desire to carry out home improvements was highest among 18 to 35 year olds, with 49% of this group planning a remortgage to fund renovations.

23 May: Rightmove Reports Record Average House Price

• Average UK property price hits £367,501
• 10.2% price growth in year to May
• Stock of properties down 55% in three years

The average price of a UK home hit a record level for the fourth month in a row in May 2022, according to data from property portal Rightmove.

Its latest house price index shows that asking prices rose by 2.1% month-on-month, taking the average value to £367,701. Annual price growth to May this year stood at 10.2%, compared with 9.9% in April.

Rightmove says average properties jumped in price by £55,551 over the past two years, a period dominated by Covid-19. In the two years prior to the pandemic, average prices rose by £6,000.

The fourth consecutive monthly price record comes against a backdrop of rising interest rates as the UK grapples with steepling inflation that has led to a cost-of living crisis amongst millions of households.

Rightmove said neither the financial pressures being faced by UK households, nor the latest rise in the Bank of England bank rate – to 1%, announced earlier this month – do not appear “to have dented the motivation and urgency to move that are being felt by many”.

However, the company added there were signs that the housing market is beginning to ease. It said that the number of properties available to buy is 55% down on the levels recorded in 2019 and warned that UK supply and demand is likely to remain “out of kilter” for the remainder of this year.

Tim Bannister, Rightmove director, said: “People may be wondering why the housing market is seemingly running in the opposite direction to the wider economy at the moment. What the data is showing us right now is that those who have the ability to do so are prioritising their home and moving, and the imbalance between supply and demand is supporting rising prices.”

18 May: ONS – Annual House Price Inflation Eases In March

Rocketing house price inflation since the start of the pandemic in 2020 could be showing the first signs easing.

Average house prices in the UK increased by 9.8% over the year to March 2022, compared to 11.3% in the year to February. 

This is according to the latest house price report from the Office for National Statistics (ONS) which is based on completed sales data, rather than mortgage approvals or asking prices.

However, the latest rise still puts the cost of the average UK property at £278,000, which is £24,000 higher than in March 2021.

Regional split

Wales saw the biggest average increases, up 11.7% to £206,000, according to the ONS. It was followed by Northern Ireland which saw average increases of 10.4% to £165,000. 

England was next with average prices up 9.9% to £298,000, while Scotland saw the smallest average increase at 8.0%, up to £181,000.

London, once again, recorded the lowest annual growth of 4.8%.

Jonathan Hopper, chief executive of Garrington Property Finders, described the latest figures as “economic gravity finally catching up with the property market”, pointing out that the slowdown has been sharpest in the nations that had previously seen the fastest rises. 

“The value of an average home in Scotland rose by a modest 8% in the year to the end of March. Just a month earlier, annual price rises north of the border were running at over 12%.”

What’s the outlook?

Amanda Aumonier, head of mortgage operations at online mortgage broker Trussle, said that we are beginning to see “key indicators that a shrink in house prices is on the horizon”. 

As an example, she cites the ratio of average house prices to average earnings (HPE), which currently stands at 7.7– above even the previous peak of 7.5 seen just prior to the 2008 financial crash.

The mortgage market has also become increasingly challenging for buyers, according to Ms Aumonier: “We’ve seen Interest rates add over £1,000 to mortgages annually, and they are set to rise further to 2% by the end of the year. This could put homeowners under a tremendous burden if they have stretched themselves on short-term deals.”

She added: “The good news is that long term deals are very competitive at the moment. There is just 0.34% interest separating a 2-year fix from a 10-year fix. With interest rate hikes likely, buyers might want to think in the long term when selecting their mortgage deals.”

6 May: Halifax Reports Record Prices

• Average property worth record £286,079
• Prices rose 10.8% in year to April
• Growth strongest in Northern Ireland

The average UK house price grew by 10.8% in the year to April 2022, taking it to a record high of £286,079, according to the latest house price index from Halifax.

The mortgage lender says average prices grew by 1.1%, or £3,078, in April – this is the tenth month in a row that UK property values have increased, the longest run of continuous gains in six years.

Halifax adds that average property prices have risen in value by £47, 568 over the past two years.

It says housing transactions and mortgage approvals remain above pre-pandemic levels and a continued growth in new buyer enquiries suggests activity will remain heightened in the short-term.

Yesterday, in a bid to counter steepling inflation, the Bank of England raised interest rates to 1%, the UK’s fourth rate rise in less than six months. The increase means dearer home loans for customers with tracker and variable-rate mortgages in the short term, and more expensive fixed rates in the future. 

Halifax’s managing director, Russell Galley, acknowledged that “the headwinds facing the wider economy cannot be ignored”.

Galley added: “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”.

Halifax reported that Northern Ireland, at 14.9%, overtook the South West of England (14.8%) in April as the UK’s strongest region for annual house price growth.

Elsewhere, several other regions also posted double-digit performance in April, including: Wales (14.2%); East Midlands (12.8%); and the South East (12.1%). The London region was responsible for the weakest growth (6.2%), although this figure was up on the 5.9% recorded a month earlier.

Amanda Aumonier, head of mortgage operations at Trussle, our online mortgage broking partner, said: “It’s only a matter of time until the cost-of-living crisis begins to catch up with the housing market. 

“Households are beginning to feel the effect of inflation, higher energy bills and the soaring cost of living and so are cutting back on day-to-day essentials. This will likely get worse with increasing interest rates.

“High loan-to-value mortgages will be a lifeline for those unable to save during this difficult financial period. As it stands, there are only fifty-six 95% mortgages available. As such, we would urge lenders to do all they can to responsibly look at introducing more high LTV deals to the market so that everyone can aspire to own their own home.”

5 May: What The Bank Rate Hike Means For Mortgages

Laura Howard, Forbes Advisor’s spokesperson, responds to today’s announcement of an increase in the UK Bank rate:

“Today’s decision by the Bank of England to raise interest rates to 1% came as little surprise. After all, the previous rise – back in March, to 0.75% – was the result of a vast majority (8-1) vote in favour by the Bank’s Monetary Policy Committee.

“The Bank uses interest rates as a tool to control rising inflation and CPI  stood at 7% in the 12 months to March 2022 – way above the government’s 2% target and the highest recorded for 30 years.

“It’s the same story in the US, which – just yesterday – saw the Federal Reserve increase rates from 0.5% to 1% in the wake of the highest inflation the country has seen in 40 years.

“While widely anticipated, the latest rise will come as worrying news for the nation’s millions of UK mortgage holders who are already grappling – or even unable to meet – the relentless rising cost of essentials, from energy bills and petrol, to the grocery shopping.

“Anyone paying their lender’s standard variable rate (SVR), or on any mortgage deal that’s linked to the Bank rate, will have to absorb an almost immediate impact in the cost of their monthly payments.

“As an example, the latest 0.25 percentage point rise will add around £25 onto the monthly cost of a £200,000 mortgage priced at a variable 2.5%. But for these borrowers, it’s the fourth blow of its kind since December last year – when the Bank rate stood at a much leaner 0.1%.

“First-time buyers and those looking to remortgage are likely to find that this, and previous, interest rate rises have already been factored into the cost of new mortgages.

“And, while homeowners who are part-way through a fixed-rate deal will be sheltered from rises for now, when the agreed term ends they are likely to land in an environment where new mortgage deals are considerably more expensive.

“With the rising cost of living not looking to dissipate any time soon, the fact this is also likely to result in further interest rate rises is something of a double whammy.

“In light of this fact, it might be worth considering reserving your next mortgage deal which you can typically do between three and six months in advance of it starting. This means essentially, securing rates as they are today and taking advantage of them in what is likely to be a higher interest rate environment later in the year. There is no obligation to take the deal so there’s nothing to lose if you change your mind.”

Financial pressure

Amanda Aumonier at our online mortgage broker partner, Trussle, added: “Homeowners are under incredible financial pressure and this interest rate rise will only add further fuel to the fire in the short term. Of course, the Bank of England needs to look long term, but for many this will be the straw that breaks the camel’s back.

“It is crucial that homeowners understand their options. In recent years, there was a credible case for a ‘wait and see’ approach that saw many households drift onto expensive SVRs in the hope that interest rates would fall even further. However, those days are well and truly behind us and the only way is up for interest rates.

“Therefore, we would urge anyone approaching the end of their mortgage term to speak to a broker. Our research shows remortgaging can save homeowners £4,000 per year.

Prior to the BOE adopting a new position in December 2021, interest rates had been at a historic low of 0.1% as the Bank tried to alleviate economic pressure from the pandemic. However, interest rates now stand at 1%, their highest rate since 2009.

4 May: Majority Of First-Time Buyers Delayed By Cost Of Living Crisis

The majority of first-time home buyers are putting off their purchase due to concerns over cost, according to a survey by Nationwide Building Society. 

Nationwide’s poll found that 70% of people who had planned to buy their first home in the next 12 to 24 months are delaying the purchase due to difficulties saving for a deposit. 

On average, these buyers expect to delay their purchase almost two years, while 19% said they would delay by at least three years.

The survey, which gathered responses from more than 2,000 people planning to buy their first home in the next five years, found the ongoing cost-of-living crisis is having a significant impact on people’s ability to save for a home. 

The majority (88%) of respondents say the crisis will affect their saving plans, while almost half (48%) have already reduced the amount they’re saving towards a deposit. A further 38% report dipping into their deposit fund to cover another expense.

Saving for a deposit is seen as the single biggest barrier to homeownership, with 28% of people in the Nationwide survey citing it as their main concern.

According to the Office for National Statistics (ONS), a 10% deposit on a typical first-time buyer home represents 60% of the buyer’s gross annual income, so this difficulty is unsurprising.

Faced with record- high house prices, 69% of people surveyed by Nationwide say they would consider moving to a different area to get on the property ladder. In Greater London, where house prices remain the highest in the UK, 79% of people say they would consider moving. 

Paul Archer, senior mortgage manager at Nationwide, says: “Building a deposit remains the single biggest barrier to homeownership today, with many people starting out facing a long uphill battle to save.

“The rising cost of living has made this even harder.”

4 May: Zoopla Reports Record Average Price

• Average UK home worth £249,700
• Average price up 8.3% in year to March 2022
• Wales records highest regional growth

The average price of a UK residential property rose to a record £249,700 in March this year, according to the latest data from Zoopla.

The property website’s house price index shows that average prices grew by 8.3% in the year to March 2022, down slightly from the 8.8% recorded a month earlier. Zoopla says that average price growth since the start of the pandemic in March 2020 stood at 13%, equal to a rise of about £29,000 over the two-year period.

The company believes house prices are being pushed up because buyer demand remains strong in the face of constrained supply. It says higher demand has also driven more transactions, with current levels of sales agreed running more than 20% higher than pre-pandemic levels.

Zoopla calculates that rising house prices mean 4.3 million UK homes have been pushed into a higher stamp duty (or national equivalent) bracket since March 2020.

The company reports that over a quarter (28%) of these properties, around 1.2 million homes, located in England and Northern Ireland have now exceeded the initial stamp duty threshold of £125,000.

In Wales and Scotland, rising house prices mean a further 360,000 homes have also breached the initial threshold where stamp duty becomes payable – £145,000 in Scotland and £180,000 in Wales.

At a regional level Wales, with a figure of 12.1%, recorded the strongest annual house price growth around the UK, the thirteenth month in a row it has hit this mark.

Zoopla reports that prices in the south west of England also achieved a double-digit return, up by 10.6% in the year to March. In contrast, annual price growth in London stood at 3.6% over the same period.

Gráinne Gilmore, head of research at Zoopla, said: “Buyer demand has been very strong since the end of the first lockdown in 2020, and the start of this year has been no exception. This has pushed millions more homes into higher stamp duty brackets, meaning that if they come to market, there is an additional cost for buyers.”

29 April: House price growth slows but market still ‘surprisingly’ buoyant

• Annual house price growth slows in April to 12.1%
• Average UK property is now worth £267,620
• 38% of people are ‘actively moving’ or ‘considering a move’

Average house price growth slowed in the year to April to 12.1%, from 14.3% recorded in March. However, it still marks the 11th time in the last 12 months that the rate of annual growth has been in double digits, according to the latest house price report from Nationwide – which puts the average value of a UK property at £267,620.

On a monthly basis, prices increased by 0.3% in April. This marked the ninth successive monthly rise, but was also the smallest gain since September last year.

Robert Gardner, chief economist at Nationwide, said: “Continued demand is being supported by robust labour market conditions, where employment growth has remained strong and the unemployment rate has fallen back to a pre-pandemic low.”

He added that the stock of homes available on the market is also still low, which is applying continued upward pressure on house prices.

More than a third either moving – or thinking about it

This month, along with the publication of its regular house price index, Nationwide conducted a survey of around 3,000 consumers which revealed that 38% were either in the process of moving or considering a house move.

This proportion was particularly high in London, where almost half said they were moving – or thinking about doing so. Motivation for around a quarter (24%) was to secure a larger property – a similar result to in April 2021. The exception was those aged 55 and above, where nearly 40% are looking for a smaller property and only 7% are in the market for a bigger one.

However, the proportion of those citing a ‘desire to get away from city or urban life or access to a garden’ and/or for ‘more outside space’ – largely a legacy of the pandemic – declined substantially to 12% and 15%, down from 25% and 28% in April 2021.

Cost of living crisis

With the housing market activity remaining ‘solid’ in April and mortgage approvals continuing to run above pre-Covid levels, Gardner said it’s ‘surprising’ that conditions have remained so buoyant given that mounting pressure on household budgets has severely ‘dented consumer confidence’.

He said: “Indeed, consumers’ expectations of their own personal finances over the next 12 months has dropped to levels last seen during the depths of the global financial crisis more than a decade ago.

“Moreover, housing affordability has deteriorated because house price growth has been outstripping income growth by a wide margin over the past two years, while more recently borrowing costs have increased – though they remain low by historic standards.”

However, according to Nationwide’s survey, 17% of those moving or considering a move said they were doing so at least in part to reduce spending on housing by either moving to a different area and/or to a smaller home. Mr Gardner also forecasts a slowdown in housing market growth as the rest of this year plays out.

He said: “The squeeze on household incomes is set to intensify with inflation expected to rise further, perhaps reaching double digits in the quarters ahead if global energy prices remain high.

“Moreover, assuming that labour market conditions remain strong, the Bank of England is likely to raise interest rates further, which will also exert a drag on the market if this feeds through to mortgage rates.”

Effects of inflation

Amanda Aumonier at our mortgage partner Trussle said: “It’s only a matter of time until the cost of living crisis begins to catch up with the housing market, and we can see signs of house prices beginning to slow in April.

“Households are beginning to feel the effect of inflation, higher energy bills and the soaring cost of living, and so are cutting back on day-to-day essentials. Therefore, it is absurd to think that the housing market will continue to defy this trend for much longer.

“The disparity between the housing market and the financial climate could be explained by the time it takes to purchase a home. It generally takes between six and 12 weeks to complete the buying process, so the market isn’t always reflective of the current situation – many people will have started the journey before they felt any financial pressure. 

“Given that affordability and an inability to save large deposits is set to become the key factor preventing people moving homes, it is essential that mortgage products reflect this. In particular, high loan-to-value mortgages will be a lifeline for those unable to save during this difficult financial period.

“As it stands, there are only 56 95% mortgages available, and we are urging lenders to do all they can to responsibly look at introducing more high loan-to-value deals to the market so that everyone can aspire to own their own home.”

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April 25: Rightmove Reports Record Average Prices Topping £360,000

• Average property price hits record £360,101
• 9.9% price growth in year to April
• Properties selling faster than ever 
• 73% of transactions chain-free so far in 2022

The average price of a UK home hit a record level for the third month in a row in April 2022, according to data from property portal Rightmove.

Its house price index shows asking prices growing 1.6% month-on-month, or £5,537, bringing the average property price to £360,101 in April. Annual price growth stood at 9.9%.

Rightmove says the average property price has jumped by more than £19,000 in the past three months, the largest quarterly increase it has recorded. And property values are at record levels in each of the three market sectors it covers – lower, middle and upper – only the second time since 2007 the company had reported this scenario.

Quick sales

It adds that properties are selling faster than ever. In April this year, the average length of time to sell was 33 days, less than half the 67 days recorded in the same month three years ago. Rightmove says more than half (53%) of properties are selling for over their final, advertised asking price.

Tim Bannister, Rightmove director of property data, said: “With three new monthly price records in a row, 2022 has started with price-rise momentum even greater than during the stamp duty holiday-fuelled market of last year.

“The economic headwinds of strongly rising inflation and modestly rising interest rates are being kept at bay by the even stronger tailwind of property market momentum that has carried over from last year.”

Chain-free transactions

A separate report from estate agents Hamptons, has found that a record proportion of UK homes are being bought by buyers without a home to sell.

It found that, so far in 2022, nearly three-quarters (73%) of all buyers have been chain-free. This compares with 69% in 2021 and a low of 65% in 2010.

Hamptons attributes the rise in chain-free buyers to an increase in the proportion of homes bought by first-time buyers and investors.

Aneisha Beveridge, head of research at Hamptons, said: “Given chain-free buyers tend to complete quicker and sales are less likely to fall through, they are fast becoming the preferred option for sellers.”

23 April: First-Time Buyers To Be ‘Paying Mortgage In Retirement’

The next generation of homeowners may be paying off their mortgages into retirement, new data from our mortgage partner Trussle has revealed.

According to Trussle, house price inflation which has caused the average age of a first time buyer to rise to 32 from 29 a decade ago is to blame. 

Equally, a 75% year-on-year increase in first-time buyers taking out 35-year mortgages during the stamp duty holiday, in order to combat rising house prices. Over 60,000 first-time buyers did so.

The stamp duty holiday was introduced 8 July 2020 to encourage the purchase of property and buoy the housing market. The holiday came to an end on 30 September 2021 for England with the equivalent Land and Buildings Transaction Tax (LTT) holiday in Northern Ireland simultaneously ending.The  LTT holiday in Scotland drew to a close on 31 March 2021 and on 30 June 2021 in Wales.

The average house price in the UK is now £277,000 according to the latest Office for National Statistics figures, and according to Trussle most mortgage lenders require a minimum of a 10% deposit on a property.

A homebuyer purchasing a property for £277,000, who provides a 10% deposit on a 2.25%  rate mortgage can expect to pay £860 per month over the course of 35 years.

Alarming trend

Amanda Aumonier at Trussle says: “This is an alarming trend that has been brewing for years. When purchasing a home, buyers naturally think about the here and now, which typically means looking for ways to keep their payments as low as possible. 

“But, while taking out a longer term mortgage can be an effective way to keep short term costs low, you will end up paying more back in the long term. Not only this, but you could also still be paying off your mortgage during a period of life when your income begins to drop.”

However she says overpaying on your mortgage even by a little can help clear your debt faster: “For those able to get ahead of their mortgage payment, overpaying on your mortgage can significantly cut the term and therefore overall cost of your mortgage. Overpaying by as little as £50 each month can shave two years off your mortgage and save you £5,000.”

22 April: No More Ground Rent For New Leaseholders From June

Homebuyers in the market for a leasehold property in England and Wales will soon be able to cross the cost of ground rent off their list of annual outgoings.

In the first of a series of reforms to an antiquated leasehold system, the government has confirmed that the long-awaited ban on all new residential long leases will take effect from 30 June 2022. It will apply to retirement homes from no later than April 2023.

Annual ground rent has long been a controversial charge for owners of leasehold flats and houses. With no regulation and varying from lease to lease, freeholders and landlords can charge hundreds of pounds a year and provide no clear service in return.

Ground rents can also be set to escalate regularly after a given number of years, while some homeowners who bought directly from developers have seen costs double annually.

The government’s Leasehold Minister, Lord Stephen Greenhalgh said: “This is an important milestone in our work to fix the leasehold system and to level up home ownership. Abolishing these unreasonable costs will make the dream of home ownership a more affordable reality for the next generation of home buyers.”

Lord Greenhalgh said he ‘welcomed the move’ from many landlords who have already set ground rent on their new leases to zero, and he urged others to follow suit ahead of the June ban. Anyone preparing to sign a new lease on a home in the next two months should speak to their landlord to ensure their ground rent rate reflects the upcoming changes, he said.

Separate measures, announced by the government last year, include a new right for leaseholders to extend their leases to 990 years at zero ground rent, and an online calculator to help leaseholders find out how much it would cost to buy their freehold or extend their lease.

Timothy Douglas, policy and campaigns manager for trade body Propertymark, welcomed the news: “These unfair and restrictive charges levied on leasehold homeowners have in some cases been allowed to become a cash-cow and abolishing them has been a long time coming.”

The problems within the leasehold sector run much deeper than unreasonable ground rent charges, however.

A recent survey from Propertymark of more than 1,000 leaseholders revealed that, in some leasehold agreements, the freehold stipulates that homeowners must seek permission to make cosmetic alterations – with 10% being charged for doing so.

It found that, on average, freeholders charged homeowners £1,422 to enquire about installing double glazing, £887 to change the kitchen units, and £689 to replace the flooring.

Some even faced charges for changing the blinds (£526), and installing a new front door (£410).Mr Douglas said:  “These changes only legally restrict ground rents on new leases, so we hope they are a catalyst for further reform by the housebuilding sector itself and the UK Government that will release the estimated over one million existing homeowners who remain locked into these agreements.”

14 April: Record Rent Increases For Tenants In Britain

Private rents in Britain rose sharply in the last 12 months to reach an average £1,088 per calendar month (pcm) for properties outside London, according to data from Rightmove. 

This 10.8% increase from £982 pcm is the largest annual jump recorded by the property website.

Manchester and Liverpool saw the steepest increases, with average rents growing by 19.3% and 17.1% respectively. 

In the capital, rents reached a record average of £2,193 pcm in the first quarter of 2022. This represents an increase of 14.3% compared with this time last year, when the average London rent was £1,919.

According to Tim Bannister, director of property data at Rightmove, soaring rents are the result of increased demand and diminished supply: “On the supply side, we’re hearing from agents and landlords that tenants are signing longer leases, which has prevented some of the stock that would normally come back onto the market from doing so.

“When it comes to demand, we’re still seeing the effects of the pandemic, whereby tenants are balancing what they need from a home and how close they need to live to work with where they can afford.”

These record highs come at a time when many households are already feeling the pressure of an ongoing cost-of-living crisis, fuelled by rising prices across the board, from energy and fuel to groceries and Council Tax.

13 April: Annual House Price Inflation Soars To 10.9%

• Average price up 10.9% in year to February 
• Average cost of UK home at £277,000
• Wales is best-performing area

Average UK house prices rose by 10.9% in the year to February 2022, up from the 10.2% the previous month, according to the latest figures from the Office for National Statistics (ONS).

The ONS said the price of an average UK home stood at £277,000 in February, an increase of £27,000 on the same month last year.

Wales led the way in terms of the largest national house price increase, with the average property climbing in value by 14.2% to £205,000 in the 12 months to February.

Next came Scotland, which recorded a price rise of 11.7% to £181,000. England registered a rise of 10.7% to £296,000, while prices in Northern Ireland climbed 7.9% to £159,000.

In terms of UK regional performance, the South West and East of England each recorded the strongest annual growth with prices rising by 12.5% in the year to February 2022. 

Average prices in London rose by 8.1% over the same period. This was the weakest of the UK’s regions, although the figure was up sharply from the 3.8% registered by the capital in January this year.

Mortgage market

Amanda Aumonier, head of mortgage operations at online mortgage broker Trussle, said: “In the midst of a cost-of-living crisis, the property market seems at odds with the rest of the economic climate. All of the indicators show that house price growth is continuing to go from strength to strength.

“However, the dashboard warning lights are starting to light up. Households are projected to be worse off by around £900 per year from inflation alone, which will without doubt have a knock-on effect on the property market. Lenders are clearly beginning to realise this and are betting on an economic downturn impacting the property market.”

Aumonier added that in recent days, interest rates on five and 10-year mortgage products had begun to fall in line with, and in some cases drop even lower than, the rates on two-year home loans.

Nicky Stevenson, managing director at estate agent Fine & Country, said: “House price growth continues to move at a rate of knots and it remains unclear whether this marks the apex of this unprecedented boom. 

“At the moment, cash-rich buyers appear to be shrugging off the challenges that are mounting in the broader economy, but the picture may change in the summer as lenders reassess affordability tests.”

7 April: Halifax Sees Record Property Prices

• Average property hits record £282,753
• Prices up 11% in year to March
• Growth strongest in SW England

The average UK house price climbed by 11% in the year to March 2022, taking it to a record high of £282,753, according to the latest house price index from Halifax.

The mortgage lender says average prices grew by 1.4%, or £3,860, in March – the largest month-on-month increase since September last year.

UK house prices have risen consecutively for nine months. Halifax says the average UK property has increased in value by £28,113 in the past 12 months. The year-on-year rise is on a par with average annual UK earnings of £28,860 before tax.

The bank says south west England is the UK’s strongest-performing region, with annual house price growth of 14.6%.

Wales, which held the regional top monthly spot since the start of 2021, recorded a figure of 14.1% in the year to March. The average house price in Wales now stands at a record £211,942.

Elsewhere in the UK, property prices over the past year grew by 13% in Northern Ireland and 11.6% in south east England. Halifax says London was the UK’s weakest-performing area last month. But, with a figure of 5.9%, house prices are continuing to recover in the capital.

Russell Galley, Halifax’s managing director, said: “With 2021’s strong momentum continuing into the beginning of this year, the annual rate of house price inflation continues to track around its highest level since mid-2007.

“The story behind such strong house price inflation remains unchanged: limited supply and strong demand, despite the prospect of increasing pressure on household finances.”

Amanda Aumonier at online broker Trussle, Forbes Advisor’s mortgage partner, said: “House price growth continues to march to new heights. However, with an increasingly dire financial climate settling in, we may well see this appetite drop off in the coming months.

“Anyone taking out a mortgage now may want to look at longer term options. While two-year fixed mortgages are traditionally the most requested, five-year fixed mortgages are currently proving to be a popular choice.”

31 March: Nationwide reports 14.3% price growth in year to March

• Annual growth up 14.3% from 12.6% in February
• Average property now worth record £265,312
• Prices up by 21% on pre-pandemic levels

Nationwide building society’s latest House Price Index says the price of a typical UK home is at a record high of £265,312, with prices increasing by over £33,000 in the past year. 

It puts annual price growth at 14.3% in the year to March, notably higher than the 12.6% recorded in February, suggesting the traditional spring increase in demand for properties is well under way.

Prices are now 21% higher than before the pandemic struck in early 2020. Property values have been pushed higher as households seek accommodation suited to changing lifestyles, including more time spent working from home and new commuting routines.

Robert Gardner, Nationwide’s Chief Economist, said the pace of increase is the strongest since November 2004: “The price of a typical UK home increased by over £33,000 in the past year. 

“The market has retained a surprising amount of momentum given the mounting pressure on household budgets and the steady rise in borrowing costs. The number of mortgages approved for house purchase remained high in February at around 71,000, nearly 10% above pre-pandemic levels. A combination of robust demand and limited stock of homes on the market has kept upward pressure on prices.

Mr Gardner added that significant savings accrued during lockdowns is also likely to have helped some prospective homebuyers raise a deposit: “We estimate that households accrued an extra £190bn of deposits over and above the pre-pandemic trend since early 2020, due to the impact of Covid on spending patterns. 

“This is equivalent to around £6,500 per household, although it is important to note that these savings were not evenly spread, with older, wealthier households accruing more of the increase.”

Despite the current upward pressure on prices, Mr Gardner believes the housing market is likely to slow in the quarters ahead: “The squeeze on household incomes is set to intensify, with inflation expected to rise further, perhaps reaching double digits in the quarters ahead if global energy prices remain high. 

“The Bank of England is likely to raise interest rates further, which will also exert a drag on the market if this feeds through to mortgage rates.”

Mortgage impact

Amanda Aumonier at our mortgage partner, Trussle, said: “The fact we are still seeing such a level of activity in the market is likely because the availability and cost of mortgages has remained consistent throughout, ensuring products remain accessible. However, unless more strident measures are taken to tackle inflation, only time will tell whether price growth will continue in the long run.

“It is difficult to see how inflation will not start to impact the house buying pipeline, as buyers are forced to clamp down on their expenditure.

“The recent Spring Statement provided little protection for households against increasing inflation. This was particularly the case for middle income earners, who are typically next time buyers, and consequently this section of the property market could see even greater strain in the coming months.”

29 March: Zoopla Reports Record Average Property Price

• Average UK home worth £245,200
• Average price up 8.1% in year to February 2022
• Wales has highest regional growth 

The average UK house price rose to a record £245,200 in February 2022, according to the latest data from Zoopla.

The property portal’s house price index showed that average house prices grew by 8.1 % in the year to February, up on the 7.8% recorded a month earlier.

Zoopla reported that buyer demand across the UK was unseasonably strong, with demand for family houses more than twice as high as usual for early spring. 

The company said there had also been a rebound in the demand for properties in urban centres since the start of this year, as life in cities began to return to normal following the pandemic. 

Zoopla added that the number of homes listed for sale across the average UK estate agency branch had moved up slightly by 3.5% in the 28 days to 20 March. But the company said the stock of homes available to buy is 42% below the UK’s five-year average.

At a regional level Wales, with a figure of 11.8%, recorded the strongest annual house price growth – the 12th month running that it had achieved this status. In contrast, price growth over the past 12 months to February was slowest in London, which recorded a figure of 3.2%.

Gráinne Gilmore, Zoopla’s head of research, said: “Buyer demand remains elevated as the trends that emerged during the pandemic among households about where and how they are living, continue to drive the market. Demand is strongest for family houses, indicating a continued appetite for additional internal and external space.”

23 March: Annual House Price Inflation Dips To 9.6% – ONS

• Average house price up 9.6% in year to January
• Average cost of UK home £274,000
• Wales best-performing location 

Average UK house prices rose by 9.6% in the year to January 2022, down from 10% recorded the previous month, according to the latest figures from the Office for National Statistics (ONS).

The ONS puts the price of an average UK home at £274,000 this January, an increase of £24,000 on the same month in 2021.

Wales continues to lead the way in terms of the largest national house price increases, with property prices in the country climbing 13.9% to an average of £206,000 in the year to January 2022.

Scotland saw prices rise by 10.8% to £183,000 over the same period. England registered a 10.4% increase to £292,000, while prices in Northern Ireland climbed by 7.9% to £159,000.

In terms of UK regional performance, the East Midlands recorded the strongest annual growth with prices rising by 11.6% in the year to January. Average prices in London rose by just 2.2% over the same period, the weakest of the UK’s regions.

Nicky Stevenson, managing director at estate agents Fine & Country, said: “A modest tightening in house price growth has been expected for some time with challenges building across the broader economy. Affordability has been stretched by a spike in inflation and the consequential upward pressure on interest rates.”

Nathan Emerson, CEO of housing industry body Propertymark, said: “What these ONS figures suggest is that the cost of living, energy prices and rising interest rates mean buyers are beginning to be more cautious with their cash. 

“Our data shows there are more properties entering the market, bringing signs of an equalisation between supply and demand which will likely have a more stabilising effect on prices in the coming months.”

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21 March: Rightmove Sees Average Price Top £350,000

• Average British home worth record-breaking £354,564
• 10.4% annual price growth in March, highest in eight years
• Largest supply/demand mis-match ever 

The price of an average UK home hit a record level this month, according to the latest data from property portal Rightmove.

Rightmove’s house price index shows average asking prices grew by 1.7% month-on-month, or £5,760, to stand at £354,564 in March 2022. Rightmove says prices last rose this steeply in March 2004.

The latest increase contributed to an overall rise in the annual growth rate for average house prices of 10.4% to March 2022, its highest level in nearly eight years.

Rightmove says the growth figures have been stoked by a large imbalance between buyer demand and the number of properties for sale.

It adds that, with more than twice as many buyers as sellers, the property market is entering the spring selling season with the biggest mis-match between supply and demand it had ever measured.

Rightmove says it is too early to know how the property market will be affected by the longer-term economic impact of the war in Ukraine. 

Rightmove director, Tim Bannister, said: “The imbalance between high buyer demand compared to low available property supply is the greatest we have ever seen for the start of a spring market, meaning the chance of being able to pick and choose between several buyers is strong.

“The proportion of properties finding a buyer within the first week is also at an all-time high for this time of year, so sellers with an appropriately priced and well-presented property can expect a shorter marketing period than the norm.”

Kate Eales from estate agent Strutt & Parker said: “The market continues to be competitive, with demand outweighing supply, driving up house prices across the country. But despite historically low stock volumes dominating headlines over the past few weeks, we’re beginning to see incremental increases in the number of homes coming to the market as we enter spring.”

7 March: Average UK Property Price Breaks Record – Halifax

• Average UK property hits record £278,123
• House prices up 10.8% in year to February
• Wales continues to lead regional charge

The average UK house price climbed by 10.8% in the year to February 2022, taking it to a record high of £278,123, according to the latest house price index from Halifax.

The company says average house prices grew by 0.5% in February, the eighth rise in consecutive months making the annual growth rate the strongest in 15 years.

Average property values have risen by 16%, or £38,709, in the two years since February 2020, just before the start of the Covid-19 pandemic.

Halifax says Wales, with annual house price inflation of 13.8%, was the UK’s strongest performing area. It notes that South West of England (13.4%) and Northern Ireland (13.1%) both recorded strong annual gains.

London (5.4%) was the weakest performing area, but Halifax says the annual growth figure was the capital’s highest since the end of 2020.

Russell Galley, Halifax’s managing director, said: “The UK housing market shrugged off a slightly slower start to the year with average property prices rising in February by £1,478 in cash terms. This was the eighth successive month of house price growth, as the resilience which has typified the market throughout the pandemic shows little sign of easing.”

Amanda Aumonier, head of mortgage operations at online mortgage broker Trussle, said: “While today’s news is positive for homeowners, it remains to be seen how long house price growth can continue to climb in the difficult economic climate.

“Interest rate rises, increasing inflation and the spiralling cost of utilities are placing an extreme burden on households. This financial pressure will inevitably impact new and old buyers’ ability to afford property and so we could see a significant decrease in demand in the coming months.”

4 March: Zoopla Hails Record Average Property Price

• Average home worth £244,100
• Average prices up 7.8% in year to January
• Wales again sees highest growth

The average UK house price rose to a record £244,100 in January 2022, according to Zoopla’s latest house price index. Growth hit 7.8% in the 12 months to January this year, down from 8% the previous month.

Zoopla says buyer demand for homes in February 2022 was 70% above the five-year average, while the number of homes for sale was down 43%.

But it adds that, since the start of 2022, new property listings in certain UK regions, including the East Midlands, Yorkshire and the Humber and Scotland have exceeded levels recorded in the three years to 2020, pointing to “a turnaround in supply”.

Wales continues to lead the charge in terms of regional annual house price growth, rising by 11.7% in the year to January 2022, beating all other regions for the eleventh month in a row. Growth was slowest in London, where the figure was 3.1%.

Grainne Gilmore, Zoopla’s head of research, said: “The data indicates that more homes are coming to market, as movers and other owners list their properties for sale. This will create more choice for the many buyers active in the market.

“However, the imbalance between high demand and supply will take much longer to unwind and this will continue to underpin pricing in the coming year.”

Guy Gittins, CEO of estate agents Chestertons, said: “To see new buyer enquiries of this scale at the beginning of the year is truly remarkable and a strong indication for the market to remain buoyant for at least the first half of 2022.”

2 March: Nationwide – Average UK Property Price Hits Record High

• Annual house price growth surges 12.6%
• Typical home worth record £260,230
• Average house price 20% higher than 2020

The price of an average UK house soared to a record level of £260,230 last month, according to the latest data from Nationwide.

The building society said the price of a typical British home surged by 12.6%, a rise in cash terms of £29,162, in the 12 months to February 2022.

The latest house price increase, up 1.7% month-on-month, was the seventh rise in consecutive months. Nationwide said house prices are increasing at their fastest rate since June last year.

It said the continued buoyancy of the housing market was surprising, given the mounting pressure on household budgets caused by rising inflation, currently standing at 5.5%, and in light of increased borrowing costs.  

The Bank of England has raised the bank rate twice since December last year. The figure currently stands at 0.5% with the prospect of another rise in the pipeline, perhaps as soon as this month (the next bank rate decision is due on 17 March).

Robert Gardner, Nationwide’s chief economist, said: “The strength of the housing market is particularly noteworthy since the squeeze on household incomes has led to a significant weakening of consumer confidence.

“The economic outlook is particularly uncertain. It is likely the housing market will slow in the quarters ahead,” he added.

Increasing pressure

Amanda Aumonier at online Trussle – our mortgage broker partner – said: “While it’s good news house price growth remains steady, homeowners are continuing to face increasing pressure on everyday bills. 

“Alongside the overall increase on household bills, the past week has seen petrol and diesel prices rise significantly – something that may hit those saving for potential house deposits.

“As people take stock of their current financial situation and manage the increased cost of living, this could impact the pipeline of homebuyers, decreasing the demand on property and the likelihood of bidding wars which could, together, halt any further growth in house prices.”

Nicky Stevenson, managing director at estate agent Fine & Country, said: “Rocketing energy prices, volatile stock markets and creeping interest rates have yet to make even the smallest dent on turbo-charged house price growth.

“This is a remarkable bull run and the prospect of any house price correction seems rather remote for the time being. Heady gains are likely to continue unless we see a flood of new listings come on to the market.”

21 February: Rightmove Notes Record Prices, Signs Of Busier Market

• Average asking prices in February up a record £7,785 compared to last month
• Increases driven by ‘second steppers’ in search of more space
• Prices nearly £40,000 higher than since the start of the pandemic

The price of property coming to market increased by 2.3% in February, equating to £7,785, according to Rightmove’s latest House Price Index.

The hike marks the biggest monthly jump in pounds the property portal has recorded in its 20 years of data-gathering. It also brings the average asking price of a UK property to a staggering £348,804.

On an annual basis, average asking prices are now 9.5% higher than in February 2021, marking the highest annual rate of growth since September 2014. Prices have risen by nearly £40,000 in the two years since the pandemic started, compared to just over £9,000 in the previous two years.

Market activity is also showing signs of returning, with estate agents reporting a 16% increase in the number of potential buyers making enquiries this month, compared to last year.

London, which has been lagging behind the rest of the UK in terms of price rises, recorded the biggest jump in buyer enquiries at 24% higher than last February.

Tim Bannister, director of property data at Rightmove, said: “As the final legal restrictions look to be ending soon, and more businesses are encouraging a return to the office for at least part of the week, we now have a group of movers who are looking to return closer to major cities, or at least within comfortable commuting distance of their workplaces.”

He added that ‘second steppers’ looking for more space than their first home offers, were also fuelling the market.

Potential sellers are showing more signs of activity, with the number of people requesting a home valuation from an estate agent up 11% compared to this time last year, said Rightmove.

While there is still a mismatch between buyer demand and the supply of home, and added pressures from the rising cost of living, Mr Bannister says that the most recent data shows, “demand rising across the whole of Great Britain, with many people determined to move as we head into the spring home-moving season.”

ONS: House Prices Rise 10.8% In 2021

• UK average house prices rise 10.8% in year to December 2021
• Average UK home in December 2021 costs £275,000 
• London sees weakest annual growth at 5.5%

Average house prices in the UK stood 10.8% higher in December 2021 compared to the previous year. The annual rate of house price inflation was slightly up on the 10.7% recorded in December 2020, according to the latest UK House Price Index (UK HPI) from the Office for National Statistics (ONS).It puts the average cost of a UK home at the end of last year at £275,000 – £27,000 more expensive than the same time in 2020.

Research from Savills shows that this annual increase means that, effectively, ‘houses earned more than people’ last year. According to the 2021 Annual Survey of Hours and Earnings, the average UK worker earned £25,971.

The UK HPI comes on the same day as the latest inflation figures, which show that the cost of living, as measured by the Consumer Prices Index (CPI), rose to 5.5% in January, marking a 30-year high. This is making further rises in the Bank of England base rate more certain which, in turn, is putting upward pressure on the cost of mortgages.

Miles Robinson, head of mortgages at online broker Trussle, said: “While continued house price growth is positive news, many homeowners are concerned about their finances, as soaring inflation and the cost of energy are putting households under extreme pressure.”

Prices by UK country 

In regional terms, Wales led the charge with house prices increasing by an average 13% over the year to December, a whisker under the 12.6% recorded in November. It puts the average cost of a home in Wales at £205,000.

In Scotland, property prices increased by 11.2% over the year to December putting the cost of an average home at £180,000. The rate of growth in Scotland slowed from 12.1% in the year to November 2021.

England was the next-best performing region with annual house price increases of 10.7%, slightly up from 10.5% in the year to November last year. The average cost of a home in England stands at £293,000. However, London continued to see weakest annual growth at 5.5%.

Northern Ireland continues to be the cheapest country in the UK for buying a home, where property values (at the end of the third quarter of 2021 which is most recent data), stand at an average £159,000. It marks a 10.7% increase on the previous year.

However, because the UK House Price Index (HPI) uses data from completed transactions, from HM Land Registry and the respective country equivalents, the ONS said there may be ‘increased volatility’ in the latest estimates, especially where transaction numbers have been low.

7 February: Halifax: House Prices Continue Upward – But Rate Of Growth Slowing

• Annual house price growth steady at 9.7%
• Monthly house price growth slows to 0.3%
• Average UK house prices stand at £276,759

Property prices in January continued to rise, but the rate of growth is slowing according to the latest house price index from Halifax. It reports that, while average values are 9.7% up on this time last year, the monthly growth stands at 0.3% – the slowest recorded since June 2021.

Affordability remains at historically low levels as house price rises continue to outstrip earnings growth, according to Russell Galley, managing director at Halifax: He said: “Despite record levels of first-time buyers stepping onto the ladder last year, younger generations still face significant barriers to home ownership as deposit requirements remain challenging.”

He added that the challenges of getting onto the property ladder are likely to become even more acute in the short-term as household budgets come under mounting pressure. 

Energy costs are set to soar from 1 April, for example, following a 54% rise in the price cap, while the cost of mortgages is also climbing after two interest rate hikes in the last three months by the Bank of England. It has put the current base rate at 0.5% with city economists forecasting at least two more rises by the end of the year.

This is on the back of an already-soaring UK inflation rate which, as measured by the Consumer Prices Index, jumped to 5.5% in the 12 months to January 2022 – its highest level in 30 years. 

The relentless rise of property prices is being exacerbated by the current lack of available stock. According to Nathan Emerson, chief executive of estate agent trade body, Propertymark, the number of homes for sale is between 40% and 50% down on last year.

He said: “Our member agents are reporting that the number of offers they are receiving on properties each month can be well into double figures and that sales are continuing to be agreed at over the asking price.”

More homes will need to become available for sale before prices can slow, he added.

Wales continues to be the strongest-performing UK region. With annual house price inflation of 13.9% in January and an average property value of £205,253.

Northern Ireland and Scotland also continue to record strong price growth, with prices up 10.2% and 8.9%, on this time last year respectively. 

In England, the North West was once again the strongest performing region, up 12% compared to last January, while London remains the weakest performing region with annual price growth of 4.5%.

3 February: Bank Of England Raises Rate To 0.5%

The Bank of England (BoE) today raised its Bank interest rate to 0.5%, the second increase in two months.

The announcement, the first back-to-back interest rate rise since 2004, will see the cost of lending rise, including an automatic increase in tracker mortgage rates. The news also means dearer home loans for customers with standard variable rate mortgages, if their lenders choose to pass on the increase.

Today’s decision will further intensify the squeeze on household finances, following a 54% increase in the energy price cap to £1,971 from this April, announced by the energy regulator Ofgem earlier this morning.

The BoE’s Monetary Policy Committee (MPC) voted 5-4 to double the rate from its previous level of 0.25%. The BoE said that those MPC members in the minority had called for a rate rise of 0.5 percentage points to 0.75%.

The latest inflation figure, reported last month, showed that the cost of living grew by 5.4% in the 12 months to December 2021, its highest level in 30 years. Inflation is almost three times the BoE’s 2% target, as set by the government.

The MPC’s decision to dampen down the UK’s overheating economy by increasing interest rates had been predicted by most City commentators.

The MPC voted unanimously not to reinvest any of the £875 billion of government bonds it has bought under quantitative easing programmes when they mature.

Online mortgage broker, Trussle, calculated that the latest rate rise could add a further £331.56 to the average mortgage annually for customers whose home loans are based on standard variable rates. 

This is based on the average house price of £264,000 and assuming a 15% deposit. The calculation comes on top of the £324.48pa increase customers faced following December’s rate rise last year.

The next Bank rate announcement is due on 17 March. A further two rate increases are thought to be in the pipeline for 2022.

Demand Surges As Home Buyers Flood Back To Cities

Home buyers are flocking to city centre locations in numbers not seen since before the pandemic struck in 2020, according to online mortgage broker Trussle.

The broker says that, after a two-year break, there are clear signs that prospective property buyers are showing a rediscovered desire for city living.

Enthusiasm for cities declined during the pandemic as remote working became the norm and local amenities were closed. 

But Trussle says demand for mortgages in London, Manchester and Birmingham is rising. Mortgage applications in London now account for 14% of all mortgage applications, a level last seen in December 2019.

The broker says mortgage applications in the capital have increased by 30% in recent months and adds that Manchester and Birmingham are proving even more popular as potential home buying destinations. In Manchester, applications are double where they were in 2019.

According to Trussle, buyers with an appetite for a return to city living want more space than previously, to take into account the potential to work from home.

Miles Robinson, the broker’s head of mortgages, said: “With high streets back in business, the allure of city living is returning. This is clearly beginning to resonate with buyers. We are seeing interest in city centre properties up and down the UK either return to pre-pandemic levels, or move higher.”

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Nationwide: Average UK Property Price Hits Record High

• Annual house price growth surges to 11.2%
• Typical home worth record £255,556
• Housing market’s strongest start to year since 2005

The price of an average UK house hit a record level of £255,556 last month, according to the latest data from Nationwide building society.

It says the price of a typical British home surged by 11.2% in the 12 months to January 2022, up 0.8% month-on-month.

The latest price rise was the sixth in consecutive months. Nationwide says the increase means the UK’s housing market has made its strongest start to the year since 2005.

The building society adds that the total number of property transactions in 2021 was the highest since 2007 and around 25% higher than in 2019, before the pandemic struck.

Robert Gardner, Nationwide’s chief economist, said: “Housing demand has remained robust. Mortgage approvals for house purchase have continued to slightly run above pre-pandemic levels, despite the surge in activity in 2021 as a result of the stamp duty holiday, which encouraged buyers to bring forward their transactions to avoid additional tax.”

Nicky Stevenson, managing director at estate agents Fine & Country, said: “While monetary policy will tighten in 2022, this is unlikely to have a significant damping effect on the housing market any time soon, with most agents around the country still unable to find enough homes to meet demand.”

Rightmove: Seaside Town Is UK’s Housing Supply Hotspot

• Bexhill-on-Sea has most new properties for sale this year compared with 2021
• UK has 8% more properties for sale overall compared with 12 months ago
• Nuneaton in Warwickshire is fastest town for finding a buyer

A town on the English south coast and an area in the Derbyshire Peak District have topped a list of locations that have more new properties for sale this January, compared with the same time in 2021.

Bexhill-on-Sea led the new year list of ‘supply hotspots’ with an 88% increase in the number of new properties coming to market, according to the property website Rightmove.

The East Sussex town was followed by High Peak in Derbyshire, which recorded an 82% rise in new homes for sale. Chelmsford in Essex was third with a 58% increase.

Rightmove said that, regionally, the East Midlands, South East, South West, Wales and Yorkshire & Humber each recorded a rise of 10% or more in new properties for sale this January compared with the same month last year.

The company added that, as a whole, there were 8% more new properties for sale across the UK in the last week of January 2022, compared with the same time in 2021.

In terms of finding buyers, Rightmove said that Nuneaton in Warwickshire had the quickest turnaround time of 24 days. This was followed by Leigh-on-Sea in Essex and Burton-on-Trent in Staffordshire, with 27 and 29 days respectively.

Tim Bannister, Rightmove’s director of property data, said: “More new listings, coupled with the higher number of requests from prospective sellers to estate agents to value their home, certainly suggests good news and positive signs that we are moving towards a better balanced market in 2022.”

Zoopla: Average UK Property Price Hits Record Level

·      Average British home worth record-breaking £242,000
·      Housing demand up 50% compared with recent New Year periods
·      Highest regional price growth in Wales for tenth month running 

The average UK house price rose to a record £242,000 in December 2021, according to Zoopla’s house price index, out today.

The property portal says house price growth was 7.4% in the 12 months to December, and that the price of an average house has risen by £25,500 over the past two years.

It says UK housing demand in January is up by 50% compared with recent New Year periods. 

Wales recorded the highest regional annual rate of house price growth for the tenth month in a row, up 11.3% to December. Bringing up the rear was London with growth of 2.6% over the same 12-month period.

Zoopla says that, with ‘hybrid’ working from home and the office continuing to be the norm for many white-collar workers, the pandemic continues to shape the property market. 

It added that the trend for increasing space has further to run, notably for three-bedroom houses outside the London area. Demand for this type of property is four times higher than the five-year average.

Geographically, Zoopla says suburbs remain in the highest demand with Thurrock in Essex and areas around Birmingham, Glasgow and East London proving the most popular.

With city workers slowly returning to offices, the property portal added that demand for flats is at its highest level for five years.

Grainne Gilmore, Zoopla’s head of research, said: “The effects of the pandemic on the housing market cannot be underestimated. Even after nearly two years, the pandemic-led ‘search for space’ is one of the factors creating record demand for homes this month.

“The market is also being boosted by office-based workers re-thinking where and how they are living amid more hybrid working models.”

Rents increase at fastest rate on record

Average asking rents have increased at the fastest rate on record, according to Righmove, the property website.

The company said that average rents are now £1,068 per calendar month (pcm) outside of London, 9.9% higher than this time last January.

Rightmove noted that rents in London have risen beyond pre-pandemic levels for the first time and now stand at a record average figure of £2,142pcm.

ONS: Annual House Price Inflation Hits 10% 

• Average UK house prices up 10% in year to November 2021
• Average cost of UK home at £271,000
• Wales best-performing location with annual price growth of 12.1%

Average UK house prices soared by 10% in the year to November 2021, according to the latest figures from the Office for National Statistics (ONS). 

The ONS said that the latest annual growth figure was a slight increase on the 9.8% recorded a month earlier in October. 

The cost of an average home in the UK stood at £271,000 last November, an increase of £25,000 compared with the figure from 12 months earlier.

Wales led the way in terms of the biggest national house price increases around the UK. Average property prices in the country climbed by 12.1% to an average of £200,000 during the 12 months to November last year.

Next came Scotland where prices climbed by 11.4% to an average £183,000. Northern Ireland saw a 10.7% rise to £159,000, while prices in England climbed by 9.8% to £288,000.

In terms of regional performance, the south west of England recorded the strongest annual house price growth with a figure of 12.9%. London recorded the lowest figure with average prices up 5.1% in the year to November 2021.

Miles Robinson, head of mortgages at online broker Trussle, said that it was good news for homeowners that house price growth remained steady, but that there was also the need for caution: “Many homeowners are now facing a real squeeze on their finances. Increased interest rates have already had a big impact on mortgages, with sub 1% mortgage rates all but disappearing from the market overnight.

“In addition to this, rising energy costs look set to affect mortgage affordability. Big lenders have signalled that energy prices could increase by such an extent that they will need to take utility costs into account during mortgage affordability checks.

“Not only could this prohibit first time buyers with smaller deposit sizes, but it could also ring fence more competitive mortgage deals for those who really need them. Time will tell what impact these changes will have on the housing market, but it’s likely that buyers will need to take a more cautious approach during the coming months.”

Rightmove: UK Property Prices Hit Highest Annual Growth Rate For Six Years   

• Average UK property prices grow at fastest rate since May 2016
• Average asking price at £341,019 in January 2022
• First-time buyer prices hit record £214,176

Average UK property prices grew at their fastest annual rate for nearly six years this January, according to the latest data from Rightmove.

The property portal’s house price index showed that average asking prices grew by 0.3% month-on-month, to stand at £341,019 in January 2022. 

This contributed to a 7.6% rise in the overall annual growth rate for average house prices to January. Rightmove said the last time this figure was exceeded was when it reached 8.3% in May 2016.

The company added that first-time buyer asking prices reached a record level of £214,176 in January this year, a month-on-month increase of 1.4%.

According to Rightmove, the number of homes for sale per estate agency branch hit a record low of 12 properties in January, down two from the previous month. 

Available homes continue to be snapped up at speed. The company said the average time to find a buyer in December 2021 was more than two weeks quicker than in the same month the previous year.

Tim Bannister, Rightmove’s director of property data, said: “New Year sellers and buyers have been quick off the mark this year, with Rightmove recording the highest ever number of Boxing Day sellers coming to market. Early-bird sellers who got themselves ready to come to market are now benefiting from the busiest start to the new year we’ve ever recorded.”

7 January: Halifax: Average UK Property Price Breaks Record

• Average cost of UK property hits record high of £276,091
• December 2021 prices 9.8% higher than 12 months ago
• Wales continues to lead with 14.5% annual house price inflation

Average UK house prices climbed by 1.1% in December 2021 compared with the previous month, taking them to a record high of £276,091, according to the latest House Price Index from Halifax.

The company said this was the sixth consecutive month where UK house prices have risen.

Annual house price inflation stood at 9.8% in December, its highest level for 14 years. The rise meant that average property prices were £24,500 higher at the end of 2021 compared with a year earlier. 

Halifax said that Wales, with annual house price inflation of 14.5%, was the UK’s strongest performing nation or region. Other double-digit performers included Northern Ireland (10.6%) and the North West (11.8%), making the latter England’s strongest-performing region. 

Russell Galley, Halifax’s managing director, said: “The housing market defied expectations in 2021. We saw the average house price reach new record highs on eight occasions, despite the UK being subject to lockdown for much of the first six months of the year.

“Looking ahead, the prospect that interest rates may rise further this year to tackle rising inflation and increasing pressures on household budgets suggest house price growth will slow considerably.”

Miles Robinson, head of mortgages at online mortgage broker Trussle, said: “The housing market is continuing to defy the odds. But, while it’s good news for homeowners that house price growth remains steady, there is need for caution. This winter is likely to see a cost-of-living squeeze that will impact savings and which could hamper potential market growth.

He suggested fixing mortgage payments could be advantageous: “For homeowners, locking your monthly payments for a period of time can save money and help households better plan for the future.”

30 December: Nationwide: Average UK Property Price Hits Record

• Typical British home surges to record high £254,822 
• Annual house price growth at 10.4% in December
• 2021 strongest year for property prices since 2006
• Wales top performing region in past 12 months

The price of an average UK home hit a record level of £254,822 this month, according to the latest data from Nationwide building society.

It has reported that the price of a typical British home rose by 10.4% in the 12 months to December 2021, an increase of nearly £24,000 over the past year. 

Nationwide said that this made 2021 the strongest calendar year for UK house price growth since 2006.

With its house prices up 15.8% year-on-year, Wales ended 2021 as the top performing region. Nationwide started producing regional data nearly 50 years ago and said this was the first time Wales had come out on top during this period.

Northern Ireland recorded annual price growth of 12.1%, while Scotland, with 10.1%, was in line with the average UK figure.

The South-West was the strongest performing English region, with annual growth of 11.5%. Nationwide said London, which recorded a figure of 4.1%, was the weakest performing region in the UK.

London was also the only region to experience lower annual price growth this year compared with 2020, when it recorded a figure of 6.2%.

Sustained demand

Robert Gardner, Nationwide’s chief economist, said: “Demand has remained strong in recent months, despite the end of the stamp duty holiday at the end of September. The stock of homes on the market has remained extremely low throughout the year, which has contributed to the robust pace of price growth.”

Mr Gardener predicted that the UK housing market is likely to slow next year. “The stamp duty holiday encouraged many to bring forward their house purchase in order to avoid additional tax. The Omicron variant could reinforce the slowdown if it leads to a weaker labour market.

“Even if wider economic conditions remain resilient, higher interest rates are likely to exert a cooling influence. Indeed, house price growth has outpaced income growth by a significant margin over the past 18 months and, as a result, housing affordability is already less favourable than before the pandemic struck.

“However, the outlook remains extremely uncertain. The strength of the market surprised in 2021 and could do so again in the year ahead.”

Zoopla: Average UK Property Price Hits Record Level

• Average British home worth a record-breaking £240,800
• UK housing stock valued at £9.5 trillion
• Regional buyer demand currently highest in the East and West Midlands

The average UK house price rose to a record level in November 2021, having increased by £16,000 over the past year, according to Zoopla.

The property portal said annual house price growth stood at 7.1% for the 12 months to November, making the average home worth £240,8000. It estimated around a fifth of the UK’s private housing stock increased by more than £35,000 over the past year.

The company said an increase in the buying and selling of homes this year has resulted in the value of UK housing rising by £670 billion to £9.5 trillion. It added that more people moved into a new property in June than in any other month since 2005, when records began for this data.

Zoopla said buyer demand shaped the UK property market in 2021, with levels running on average nearly 16% higher than last year. Levels are currently running highest in the East Midlands, West Midlands and Yorkshire where the figures are up by 42%, 35% and 28% respectively on 2020.

Grainne Gilmore, Zoopla’s head of research, said: “This year has been a record year for the market, with the stamp duty holiday and the pandemic-led ‘search for space’ among homeowners resulting in the highest number of sales since before the financial crisis.

“However, such a busy market eroded the number of homes available to buy, as properties were being snapped up so quickly. This imbalance between demand and supply has put upwards pressure on prices. This uplift in equity may act as a spur for more households to consider a move in 2022.”

• The UK’s property price hotspot is Mountain Ash, in Rhondda Cynon Taf in Wales, where average asking prices in the area jumped by 31% over the year, according to the property website Rightmove.

Rightmove said the average asking price for a home in Mountain Ash is £137,200 this year, compared with £104,431 12 months ago.

Rightmove added that, with an increase of 10.5%, Wales tops the tables as this year’s regional property price hotspot. This was followed by the South West and South East of England at 9.6% and 9.1% respectively.

Bank Of England Raises Interest Rates To 0.25%

The Bank of England (BoE) has raised UK interest rates to 0.25%, following yesterday’s sharp rise in the inflation figure and against a backdrop of a surge in the Covid-19 Omicron variant.

This will see tracker mortgage rates increase. The news will also mean dearer mortgages for customers with standard variable rate home loans if their lenders choose to pass on the increase. 

At its last rate-setting meeting of 2021, the central bank’s Monetary Policy Committee (MPC) voted 8-1 to raise the rate from its historic low of 0.1% by 0.15 percentage points. The rise is the first increase in more than three years.

Speculation had been rife earlier this autumn that the BoE would hike interest rates before the year-end to head off an upward trajectory in the UK’s inflation rate. 

The latest inflation figure, reported on 15 December, showed that the cost of living grew by 5.1% in the 12 months to November, its highest level in over 10 years. Inflation now stands at well over double the BoE’s 2% target level, as set by the government. 

Taken by surprise

The MPC’s decision to dampen down the UK’s overheating economy took many City commentators by surprise.

The BoE said: “The labour market is tight and has continued to tighten, and there are some signs of greater persistence in domestic cost and price pressures.” 

It added that: “Although the Omicron variant is likely to weigh on near-term activity, its impact on medium-term inflationary pressure is unclear at this stage.”

Hinesh Patel, portfolio manager at Quilter Investors, said: “The BoE clearly feels vindicated to raise interest rates just before Christmas. Given high, and rising, inflation, in part a result of the BoE’s communication mis-steps creating a de-facto weaker sterling policy, it clearly felt it could no longer stay on the accelerator pedal despite the risks that are now out there in the economy.”

Nicky Stevenson, managing director at estate agents Fine & Country, said: “After wrong-footing the markets last month, rate-setters have decided that further inaction risked fuelling inflation and jeopardising the economic recovery.

“Such a minor increase isn’t going to impact the property market significantly. Currently, more than three-quarters of homeowners are locked into fixed rate deals, so will be unaffected for the time being,” she added.

The next Bank of England rate announcement is due on 3 February 2022.

ONS: UK House Price Inflation Slows To 10.2%

• Annual rate of house price inflation at 10.2% in October
• Average cost of a UK home at £268,000 
• London shows slowest annual growth at 6.2%

Property values in October were more than 10.2% higher than the same month a year ago,  according to figures from the Office For National Statistics (ONS). 

The annual rate of inflation slowed from 12.3% in the year to September, and reflects the first month there has not been a stamp duty incentive in any part of the UK. However, property values were still £24,000 more expensive on average than in October 2020.

Wales saw the steepest increase with average property values 15.5% up on last year at £203,000. In Scotland, prices rose by 11.3% over the year to reach an average £181,000. 

Property values in Northern Ireland saw the next steepest annual increase at 10.7% putting the average cost of a home at £159,000, while England saw the slowest UK growth at 9.8%. Property in England is still the most expensive however, at an average £285,000. 

London saw the slowest growth at 6.2%.

However, the housing market is looking less certain for 2022, according to Miles Robinson, head of mortgages at online broker Trussle, in the face of ‘a difficult winter for household finances in general’.

He said: “Families are facing a steep rise in energy bills and an increase in the general cost of living. This squeeze in consumer spending will almost certainly impact people’s ability to save for deposits and ultimately move home.  As such, we could well see house price growth begin to stall.”

Separate figures published by the ONS today show that the annual rate of inflation, as measured by the Consumer Prices Index, has also risen to 5.1%. This is more than double the Bank of England’s target of 2% and marks the highest level in the last decade. 

Soaring inflation has been largely driven by the rising cost of fuel, as well as food, clothing and household energy bills. It also increases the likelihood of the Bank of England putting up interest rates when it announces its latest decision tomorrow.

Robinson at Trussle added: “While it may seem small, an interest rate rise of just 0.25%, which is a likely scenario, could add £324.48 onto the average mortgage per year.”

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Trussle is a 5-star Trustpilot rated online mortgage adviser that can help you find the right mortgage – and do all the hard work with the lender to secure it. *Your home may be repossessed if you do not keep up repayments on your mortgage.

14 Dec: Bank Of England Mulls Removing Mortgage Affordability Test

• UK’s central bank to consult on scrapping mortgage eligibility stress test
• Relaxation of rules would potentially benefits thousands of first-time buyers

The Bank of England (BoE) is to consult next year on the suitability of the UK’s existing mortgage affordability tests.

Stringent lending rules were imposed on borrowers seven years ago, in the wake of the 2008 financial crisis, to prevent a potential property crash from damaging the UK economy.

The rules restricted the number of mortgages that banks could offer at high loan-to-income ratios. In effect, these limited most home loans to no more than 4.5 times a potential customer’s income (or joint income in the case of combined mortgage applications).

At the same time, affordability checks were also introduced designed to stop customers from building up excessive debt. This meant that would-be borrowers had to be able to show that they could still afford their mortgage repayments if interest rates rose by three percentage points.

Latest analysis from the BoE shows that mortgage debt to income has stabilised since the measures were brought in, suggesting that the restrictions protect against an increase in household indebtedness.

As a result, the BoE has revealed that it is now considering removing the affordability stress test element of the mortgage application procedure. It said it will set out a consultation on reforming the existing lending rules early in 2022. 

BoE governor, Andrew Bailey, said that dispensing with the affordability requirement should not be thought of as a relaxation of lending standards because the 4.5x income rule was the main filter against riskier lending. 

According to officials, removing the affordability test would make the overall rules  “simpler and more predictable”.

Miles Robinson, Head of Mortgages at online mortgage broker Trussle, comments: “There have been reports that the BOE may be imminently about to change lending rules, making it easier for borrowers to take out larger loans. Many lenders will currently only allow buyers to borrow approximately 4.5 times their salary. But, this could be extended to 6-7 times their yearly earnings.”

“These changes should be approached with an air of caution. The rules are in place to protect homeowners from any volatility that can come from interest rate rises. However, soaring house prices mean that younger buyers on average have to save for 10 years to secure the large deposits that are typically needed to access the housing market. As such, relaxing the rules just slightly could enable hundreds of thousands of first time buyers to own their own home much more quickly.”

13 Dec: Rightmove Reports Further House Price Falls Amid Near-Record Lending In 2021

• Average UK asking price stood at £340,167 in December, down 0.7% month-on month
• 2021 saw highest number of home sales for 14 years
• Amount of fully available housing stock for sale hit record low in December

Average UK property prices fell by 0.7% in December 2021, the second slight dip in consecutive months according to the latest data from Rightmove.

The property portal’s house price index showed that the average asking price of properties coming to market stood at £340,167 this month. This was £2,234 lower than November’s average, which itself was 0.6% down compared with the figure recorded a month earlier.

Rightmove attributed December’s dip to seasonal factors, adding that average house prices over the past 12 months had risen by 6.3%

With two months of sales data yet to be reported, Rightmove said 2021 had already recorded the highest number of completed home sales since 2007. It predicted that the total figure for this year will be around 1.5 million.

According to Rightmove, the amount of fully available housing stock for sale hit a record low in December. The portal added that valuation requests were up 19% on the same time a year ago, suggesting more people will be making a new year resolution to move.

Around the regions, average property prices in the West Midlands performed best by bucking December’s decline and recording a rise of 1.6% during the month. In contrast, average prices for Scotland fell 3.5% in the same period.

Tim Bannister, Rightmove’s director of property data, said: “While the pandemic is still having an ever-changing impact on society as we head into the new year, we expect a housing market moving closer to normal during the course of 2022. A return to a less frenetic market due to more choice, and forecast slightly higher interest rates, will suit many movers who have held back during the last 18 hectic months.”

Rightmove’s forecast ties in with that from trade association UK Finance, also published today. It suggests that, while an estimated £316bn in mortgage lending has been advanced by banks and building societies in 2021 (up 31% on 2020 and the highest since before the global financial crisis in 2007), lending will ‘moderate’ in 2022 to £281bn due to factors such as the end of the stamp duty holiday. 

However, UK Finance forecasts that gross mortgage lending will increase again to £313bn in 2023 due, in part, to a post-pandemic resurgence in homemover numbers. 

Free Mortgage Advice

Trussle is a 5-star Trustpilot rated online mortgage adviser that can help you find the right mortgage – and do all the hard work with the lender to secure it. *Your home may be repossessed if you do not keep up repayments on your mortgage.

7 December: Halifax: House Prices Continue On Relentless Upward Climb In November

• Average cost of UK property hits a new record high of £272,992
• Prices in November 8.2% higher than 12 months ago
• Wales leads the charge with 14.8% annual house price inflation, and cost of average home breaking £200,000  

UK house prices climbed by 1% in November compared to the previous month, according to the latest House Price Index from Halifax, reaching a new high of £272,992.

It marks the fifth consecutive month that average house prices have risen, with typical values more than £20,000 higher than last year. Prices have risen by £33,816 (or £1,691 a month) since the first lockdown in March 2020, and stand £13,000 higher the summer (June). 

While first-time buyer properties were priced 9.1% higher in November than 12 months ago (compared to 8.8% for homemovers), annual gains (at 6.6%) were slower for detached properties. This could suggest the ‘race for space’ is becoming less prominent than earlier in the pandemic, according to Russell Galley, managing director at Halifax.

He said that, overall, the buoyant market continues to be driven by a shortage of properties, a strong labour market, and competition among mortgage lenders to produce the best deals amid the continued low-interest rate environment.

Regional breakdown

Wales remains the strongest performing region by far for UK house prices, with annual house price inflation of 14.8%. The value of the average Welsh property also broke the £200,000 barrier for the first time in history in November, at £204,148. 

Northern Ireland continued to post double-digit annual growth at 10%, with an average house price of £169,348.

House prices also continued to rise in Scotland, with the average property now costing 8.5% more than last year at a current £191,140. Again, this is the most expensive on record. 

While up on October’s figure, London continues to lag behind the rest of the UK posting annual inflation of just 1.1%. However, at average house prices of £521,129, the capital is still by far the most expensive area of the UK.

Tougher times ahead

However, Halifax does not expect the current level of house price growth to continue into 2022, given that ‘house price to income ratios are already historically high, and household budgets are only likely to come under greater pressure in the coming months’.

Mr Galley said: “Looking ahead, there is now greater uncertainty than has been the case for quite some time, with interest rates expected to rise to guard against further increases in inflation.

“Economic confidence may also be dented by the emergence of the new Omicron virus variant, though it remains far too early to speculate on any long-term impact, given insufficient data at this stage, not to mention the resilience the housing market has already shown in challenging circumstances.”

Miles Robinson, head of mortgages at online broker Trussle agreed that, while it’s positive that house prices and demand remain strong as 2021 comes to a close, caution should be exercised as we enter what looks to be a ‘difficult winter for household finances’.

He said: “Families are facing a steep rise in energy bills and an increase in the general cost of living. People’s thoughts are also beginning to turn towards a possible rise in interest at the end of this year.

“While it may seem small, an interest rate rise of just 0.25%, which is a likely scenario, could add £324.48 onto the average mortgage each year. As such, now is a good time for people to start looking at their outgoings, and mortgages are the perfect place to start.”

1 December: Nationwide Sees House Prices Edge Higher, Cites Uncertain Outlook

• Annual house price growth 10.0%, up from 9.9% in October.
• Seasonally adjusted prices up 0.9% month-on-month
• House prices 15% above March 2020 levels

Nationwide, the world’s largest building society, has recorded double-digit annual house price growth for November in its latest House Price Index, out today.

It logged a 10.0% rise, a wafer higher than the 9.9% it recorded in October. 

Prices rose 0.9% month-on-month once seasonal effects were discounted. It says house prices are now almost 15% above the level prevailing in March last year, when the pandemic struck the UK and the housing market was locked down for two months.

Robert Gardner, the society’s chief economist, says the impact of the Omicron strain of coronavirus is uncertain: “A number of factors suggest the pace of activity may slow. It is unclear what impact the new variant will have on the wider economy. 

“While consumer confidence stabilised in November, sentiment remains well below the levels seen during the summer, partly as a result of a sharp increase in the cost of living. Moreover, inflation is set to rise further, probably towards 5% in the coming quarters.

“Even if economic conditions continue to improve, rising interest rates may exert a cooling influence on the market. House price growth has been outpacing income growth by a significant margin and, as a result, housing affordability is already less favourable than was the case before the pandemic struck.”

The Bank of England will announce on December 16 whether it will increase the Bank rate, which heavily influences mortgage borrowing rates, from its current historic low of 0.1%.

The Bank wrong-footed the market in November by holding the Bank rate steady, which prompted many market watchers to predict that the Monetary Policy Committee would back a rate rise later this month. But with the economic impact of Omicron uncertain, forecasters are now on less solid ground.

On Monday, the Bank said mortgage borrowing in October had fallen to its lowest level since July (see story below).

Mr Gardner said there have already been some signs of cooling in housing market activity in recent months: “The number of housing transactions were down almost 30% year-on-year in October. But this was almost inevitable, given the expiry of the Stamp Duty holiday at the end of September, which gave buyers a strong incentive to bring forward their purchase to avoid additional tax.”

Any negative sentiment plays against the buoyancy the market has exhibited thus far in 2021. Mr Gardner added: “The number of housing transactions so far this year has already exceeded the number recorded in 2020, with two months (of data) still to go. We are tracking close to the number seen at the same stage in 2007, before the global financial crisis struck.”

Nationwide says underlying housing market activity appears to be holding up well, with the number of mortgages approved for house purchases in October running above the 2019 monthly average. 

It says early indications suggest labour market conditions remain robust, despite the furlough scheme finishing at the end of September.

Miles Robinson at our online mortgage partner Trussle, commented on the Index: “While it’s positive that house prices remain strong, we must face up to what looks to be a difficult winter for household finances. Families are facing a steep rise in energy bills, as well as an increase in the general cost of living.

“People’s thoughts are beginning to turn towards a possible rise in interest rates at the end of this year. While it may seem small, an interest rate rise of just 0.25%, which is a likely scenario, could add £324.48 onto the average mortgage per year*. As such, now is a good time for people to start looking at their outgoings, and mortgages are the perfect place to start.

“Most homeowners have one, but many don’t understand just how much they could be overpaying by not having the right product for them. You could potentially save thousands of pounds per year by switching.”

* Trussle quotes a monthly repayment amount of £921.91 for a £224,400 mortgage with an interest rate of 1.73%. If the interest rate rose by 0.25 percentage points to 1.98%, the monthly repayment would be £948.95, an increase of £27.04, or £324.48 a year.

29 November: Mortgage Borrowing Plummets In Wake Of Stamp Duty Change

• Mortgage borrowing stood at £1.6 billion in October, the lowest since July 2021
• Mortgage approvals for house purchase fell to 67,200 in October from 71,900 in September

Figures out today from the Bank of England show a steep decline in mortgage borrowing in October to £1.6bn. This compares to £9.3bn in September and is the lowest since last July, when a net amount of £2.2bn of mortgage debt was repaid.

According to the Bank, October’s decrease was driven by borrowing being brought forward to September to take advantage of stamp duty land tax relief before it completely tapered off in England at the end of the month.

Approvals for house purchases fell to 67,200 in October, from 71,900 in September. This is the lowest since June 2020, and is close to the 12-month average up to February 2020, before the onset of coronavirus lockdowns. of 66,700. 

The Bank sees approvals as an indicator of future borrowing, suggesting that the market is cooling following the end of the stamp duty holidays in the UK, although other economic factors may be at play given rising inflation and the prospect for higher interest rates as early as next month.

Approvals for remortgaging rose slightly to 41,600 in October (the Bank’s data only captures those remortgaging with a new lender). This is the highest since March 2020, when it stood at 42,700, although it is well down on the 12-month average up to February 2020 of 49,100.

Distortive effect

Commenting on the figures, Lucian Cook, head of residential research at estate agent Savills, said: “There is no great surprise to see a fall in the number of mortgage approvals in October given the distortive effect of the end stamp duty stamp duty holiday in September.   

“In the year to the end of September, we saw total spend in the UK housing market exceed £500bn for the first time ever to £513bn. This represents an increase of £170bn on pre-pandemic levels, a reflection of three key factors: the so-called race for space as people looked to trade up the housing ladder, the cheap cost of mortgage finance, and the added impetus provided by the stamp duty holiday. 

“Activity in the more expensive price brackets continues to hold up strongly, so we expect to see a higher than normal spend in 2022. That said, it’s difficult to see how spending next year can match the extraordinary levels of late across the market as a whole without such a mix of strong drivers.  

“This supports our expectation that house price growth will slow to 3.5% next year.”

Savills analysis of Bank of England money and credit data

23 November: HMRC sees October property transactions October halve on September

• Provisional number of UK property sales in October 52% lower than September
• Large drop-off is due to ‘forestalling’ as buyers rush to meet the end of stamp duty holiday deadline
• Property transactions 28.2% under mid-lockdown levels recorded in October 2020

The provisional number of residential property transactions (seasonally adjusted) in October 2021 stood at 76,930, which is a staggering 52% less than September, and 28.2% lower than October last year.

The new figures are according to HMRC’s latest monthly data which estimates property transactions on homes worth over £40,000 (where stamp duty usually becomes payable).

The large drop in transactions is due to the end of the stamp duty holiday (a temporary increase in the nil rate band) which, in England and Northern Ireland, fell at the end of September. In Scotland and Wales, the end of the equivalent property tax breaks ended on 31 March 2021 and 30 June 2021 respectively.

Sarah Coles, personal finance analyst, Hargreaves Lansdown, said: “The monthly drop looks spectacular, as sales almost halved, but this was from an enormous peak, created by the final stamp duty holiday deadline. A major chunk of sales we would otherwise have expected this winter, were rushed through in time for the deadline at the end of September.

Paul Stockwell, chief commercial officer at Gatehouse Bank, added: “Transactions plummeted similarly after June’s stamp duty deadline, so it’s not surprising to see them fall in this way again. With the tax incentive now completely removed, we’ll see the back of these peaks and troughs as transactions settle into a more consistent pattern. House sales will likely return to the historic norms seen before the pandemic as the cost of moving becomes a factor again.” 

17 November: House price inflation edges 12%, average value £270,000

• UK average house prices increased by 11.8% over the year to September 2021, up from 10.2% in August
• Average UK house price was at a record high of £270,000 in September 2021, which is £28,000 higher than this time last year
• Average house prices increased over the year in England to £288,000 (11.5%), in Wales to £196,000 (15.4%), in Scotland to £180,000 (12.3%) and in Northern Ireland to £159,000 (10.7%)
• London continues to be the region with the lowest annual growth (2.8%) for the tenth consecutive month

Figures out today from the Office for National Statistics reveal that average UK house prices soared by 11.8% in the year to September, with demand fuelled by the end of the tapered Stamp Duty holiday in England. Until 30 September, the nil rate band stood at £250,000. It reverted to £125,000 on 1 October.

The UK average house price for September 2021 was a record high of £270,000, up from £263,000 in August 2021 and £242,000 a year previously. September’s figure is £6,000 higher than the previous record seen in June 2021.

Miles Robinson at Trussle, our online mortgage partner, commented on the latest figures, published on the same day the ONS revealed that the cost of living rose by 4.2% in October: “The Stamp Duty holiday incentivised buyers to accelerate their moving plans in order to save up to £15,000 in costs. As such, house price growth leading up to September was incredibly strong. 

“But, while the market remained buoyant because of this, the months ahead will likely be more difficult as buyers may start to view the market with caution. We have already seen the much publicised sub-1% mortgage deals begin to disappear, and a rise in interest rates is certainly on the cards.

“Alongside this, it looks set to be a difficult winter for household finances. Families are facing a steep rise in energy bills and an increase in the general cost of living. This squeeze in consumer spending will almost certainly impact people’s ability to save for deposits and ultimately move home. But, for those staying put, now could be a good time to remortgage, as rates remain competitive.”

According to the ONS, all UK nations experienced strong price growth in the year to September, with the average prices/percentage increases as follows:

• England – £288,000 / 11.5%
• Wales – £196,000 / 15.4%
• Scotland – £180,000 / 12.3%
• Northern Ireland – £159,000 / 10.7%.

London continues to be the region with the lowest annual house price growth in September at 2.8%, down from 6.7% in August 2021. This represents the lowest annual growth in London since July 2020. However, the capital’s average house price remains the most expensive of any region in the UK at £507,000.

The North East of England continued to have the lowest average house price, at £153,000.

15 November: Rightmove – ‘Full house’ as October prices hit record levels across all regions and buyer types in the same month

• Average asking prices in October up 1.8% to £344,445
• ‘Full house’ with record price levels across all regions and buyer types
• Continued supply shortage pushing up prices

Asking prices of property coming to market increased by 1.8% (+£5,983) in October on the previous month, marking the biggest seasonal jump since October 2015.

Last month also saw a ‘full house’ for first time since March 2007, according to Rightmove’s latest house price index. This means that price records were reached across all regions of Great Britain and for all sectors of buyers – namely first-time, second-stepper and top-of-the-ladder.

The number of sales agreed was up 15.2% in September, versus 2019, which was the was the last ‘normal market’ comparison, said Rightmove.

Director of property data, Tim Bannister, said: “Competition for property for sale remains hot this autumn, with average prices jumping by almost £6,000 in the month.

“Although more properties are coming to market, the level is still not enough to replenish the stock that’s being snapped up. Consequently, new price records have been set across the board, with every region of Great Britain and all of the three market sectors.”

He added that the ‘full house’ is an ‘extremely rare’ event, seen for the last time since March 2007.

Property stock shortages – which began after the first lockdown – look set to continue against the backdrop of a strong housing market, said Bannister, while fixing in a mortgage rate before rates rise is proving an additional incentive.

11 November: Parents Mull Buy-To-Let To Help Children At University

Two-thirds of parents would consider investing in a buy-to-let property near their child’s university to help with living costs while they are away from home. And over half (53%) would consider downsizing to help their children financially through their student years.

These are two key findings from a new report from Trussle, our mortgage broker partner.

Rents from properties in university locations can be significantly higher, and rates of occupancy more sustained, than in non-student locations, making investment an attractive proposition for property investors. 

Mortgage requirements

Many would-be buy-to-let landlords, especially those entering the market for the first time, will need to take out a special mortgage to fund the purchase. These usually require the annual rental income to exceed the mortgage due for the period by a significant amount – say, by 25% – to cover the risk of tenants defaulting and the property being vacant for lengthy so-called ‘void’ periods.

Additionally, the interest charged may be higher than for normal residential mortgages because of the risks involved.

The picture for parents seeking accommodation for their student offspring is complicated by the fact that standard buy-to-let mortgages exclude tenancies involving close relatives. This is because of the expectation that the landlord will not charge a realistic amount of rent or will be more forgiving on any non-payments.

However, a limited number of lenders offer ‘family’ buy-to-let deals that allow children to occupy the property. But in such cases, the borrower may need to demonstrate that they have sufficient earnings to cover the mortgage themselves – or their child’s part of it, in cases of multiple tenancy.

It’s also worth noting that buy-to-let mortgages are arranged on an interest-only basis, meaning the capital debt will need to be cleared in one go at the end of the term. That could mean using the proceeds of a property sale or finding the funds elsewhere.

All buy-to-let purchasers also pay higher rates of stamp duty or land tax on the purchase price. And multiple tenancy landlords are required to be licensed so they can be monitored for the standard of accommodation provided.

But Trussle says that rents from student buy-to-lets consistently outstrip the rest of the domestic rental market by 18%, making them an attractive long-term proposition for parents who may continue letting them out after their child has graduated.

Miles Robinson at Trussle said: “It’s true that buy-to-lets aren’t the bargain that they once were. Changes to tax and the Stamp Duty Surcharge have impacted returns, which made rental the king of investments, leading to a peak in popularity during 2007.

“However, this new data shows that property is still seen as a safe and reliable way of generating extra income. This can be both in the short-term, through rent collection, and long-term gains in house prices. In addition, the low interest climate means would-be landlords can lock-in a competitive buy-to-let mortgage.”

For those contemplating a buy-to-let property in a university town, Trussle identified the top towns and cities that offer the best rental yields. It used data from Zoopla and the Times Higher Education guide to calculate the property prices and rental yields in the top 30 universities across the UK.

Top 5 Rental Yields Among Top 30 UK Universities

The research also revealed the UK’s cheapest university towns to purchase a buy-to-let property. Belfast (Queen’s University) topped this list with an average house price of £152,175.

Cheapest University Locations To Purchase Buy-To-Let Property

For its research, Trussle interviewed 2,000 homeowners with children and examined house prices across 30 popular university towns and cities postcodes in the UK, using Zoopla. The top 30 universities used in the release were determined using the Times Higher Education Guide.

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5 November: Halifax Sees Annual House Price Inflation Hit 8.1% 

• Average UK property price in October £270,027
• Annual price inflation 8.1%, up from 7.4% in September
• Wales, Northern Ireland and Scotland outperform UK average

The upward trajectory of house prices continued in October, according to Halifax’s latest house price index. The cost of an average UK property increased by 0.9% last month – more than £2,500 – marking the fourth consecutive monthly rise.

Annual inflation for October stood at 8.1%, which is the highest rate the mortgage lender has recorded since June. At just over £270,000, the cost of an average UK home is now £31,516 (13.2%) more expensive than in the first lockdown in April 2020.

Russell Galley, managing director at Halifax, explained: “One of the key drivers of activity in the housing market over the past 18 months has been the ‘race for space’, with buyers seeking larger properties, often further from urban centres. Combined with temporary measures such as the cut to Stamp Duty, this has helped push the average property price up to an all-time high of £270,027.”

Mr Galley added that the performance of the economy continues to provide a “benign backdrop” to housing market activity. He said the labour market was “outperforming expectations through to the end of furlough, with the number of vacancies high and rising relative to the numbers of unemployed.”

While the Bank of England opted to keep interest rates on hold yesterday, it’s still expected to increase base rate by the end of this year to tame risks of rising inflation, while further hikes are likely in 2022. As a result, Halifax expects house buying demand to cool in the months ahead as the cost of mortgages increases. 

That said, borrowing costs will still be low by historical standards and raising a deposit is likely to remain the primary obstacle for many.

Record growth

Miles Robinson at our mortgage partner Trussle commented: “Over the past year, house prices have seen record growth, as government support helped keep the market buoyant during lockdown. While it’s positive that house prices remain strong, we must face up to the fact that activity in the market will likely slow in the coming months, and as a consequence we could see house prices begin to dwindle.

“A rise in inflation is on the cards and any increase will almost certainly trigger a corresponding spike in interest rates. As such, in contrast to previous months, buyers will likely begin to take a more cautious view of the market until they have more clarity on any potential rate rises.

“Alongside this, it looks set to be a difficult winter for household finances. Families are facing a steep rise in energy bills as well as an increase in the general cost of living. This squeeze in consumer spending will almost certainly impact people’s ability to save for deposits and ultimately move home.

“For existing homeowners who are on a standard variable rate or who are nearing the end of their mortgage term, now is the perfect time to lock-in a long-term deal at a good interest rate. While many of the much publicised sub 1% interest rate deals have started to quietly disappear, this is likely the lowest level they will reach.”

Wales remains the strongest performing region in the UK, according to Halifax, with annual house price inflation of 12.9% (average house price of £198,880), while London remained by far the weakest performing area, with prices just 0.8% higher than this time last year.

4 November: Relief for borrowers as Bank rate stays at 0.1% – for now

The Bank of England said today that its Bank base rate will remain at 0.1% at least until 16 December, when the next announcement is due. Its Monetary Policy Committee, which decides the rate, voted 7-2 on Tuesday to keep it at its current record low, where it has been since March 2020.

There has been widespread speculation that the base rate will rise sooner rather than later in a bid to keep a lid on rising prices – inflation is currently running above 3%, with the official target at 2%. But the Bank is conscious that any increase would filter through to the cost of borrowing, heaping pressure on millions of mortgage customers and potentially threatening the post-Covid economic recovery.

That said, many lenders have priced-in a base rate increase to the deals they are currently offering. And the Bank itself has said that base rate might hit 1% by the end of 2022 in response to inflationary pressures such as soaring wholesale energy prices.

You can use our interactive rates calculator to find deals for your exact requirements.

Commenting on today’s announcement, Dan Boardman-Weston at BRI Wealth Management, said: “Many were expecting a hike today in the face of rising inflation, but the decision is quite finely balanced. Economic growth is showing signs of weakening and a lot of the inflationary pressures that the economy is seeing are global in nature and likely to be transitory.

“We’d expect to see some small movements higher over the coming months but the Bank is unlikely to make significant changes given slower growth, the threat of Covid resurgence and the transitory nature of this inflation. We continue to believe that interest rates will stay low in a historic context and that the Bank will be cautious about aggressively responding to this bout of inflation.”

3 November: Nationwide sees average property value top £250,000 for first time

• Average UK house prices in October bust £250,000 mark for first time
• Annual house price growth stands at 9.9%
• Outlook for property market ‘extremely uncertain’

Average house price growth in the year to October pushed ahead at 9.9%, according to figures from Nationwide published today – just marginally lower than the 10% recorded in September.

Monthly growth was recorded at 0.7%, taking seasonality into account, compared to 0.2% in September.

The latest boost pegs the cost of an average home in October at £250,311 compared to £248,742 in September.This marks a £30,728 price rise since the start of the pandemic in March 2020 – as well as the first time average values have passed the £250,000 mark in the history of the lender’s house price index.

Robert Gardner, Nationwide’s chief economist said: “Demand for homes has remained strong, despite the expiry of the stamp duty holiday at the end of September. 

“Indeed, mortgage applications remained robust at 72,645 in September, more than 10% above the monthly average recorded in 2019. Combined with a lack of homes on the market, this helps to explain why price growth has remained robust.”

However, Mr Gardner added that the outlook for the property market remained “extremely uncertain”. Consumer confidence has weakened in recent months, while the growing likelihood of a rise in interest rates could exert a cooling influence on the market, he said.

It also remains to be seen how the wider economy will respond to the withdrawal of government support measures.

Miles Robinson, head of mortgages at our broker partner, Trussle, commented: “While house price growth is continuing to exceed expectation, it may well start to stutter as inflation and potential interest rate rises could mean buyers begin to be more cautious in the months ahead.”

He added that now could be a good time to lock in a competitive interest rate with a fixed term mortgage: “A high interest rate can increase monthly repayments significantly, but many lenders are still offering sub-1% interest rates on mortgage products. This may not last, however, with the Bank of England signalling that a rate increase is imminent, so acting quickly is vital.”

Unsatisfied demand

Guy Gittins, CEO of estate agents Chestertons, said: “Buyer demand remains unsatisfied and properties are going under offer increasingly faster.

“In October we witnessed a 22% uplift in the number of offers being made and a 26% increase in agreed sales compared to September. The sustained demand is reducing the supply of properties for sale, which in turn is driving prices higher. This is providing further motivation for people to move before the house they want to buy becomes more expensive. 

Mr Gittins said buyer enquiries normally tail off in the latter months of the year, but they are in fact increasing: “At the end of last month, we recorded our highest ever number of new buyer enquiries at this time of year, which was 18% higher than this time last year when. We saw demand being driven by buyers who didn’t manage to agree a deal within the Stamp Duty holiday timeframe and those who put their search on hold during the summer break.

“Looking ahead, we expect the anticipated small increase in interest rates (likely to be announced tomorrow), to spur more buyers to finalise their property search sooner rather than later in order to benefit from the currently more favourable rates.” 

21 October 2021 – HMRC property transactions

• Property transactions soared in September 2021, up 67% from August
• September’s figure almost 70% higher compared with the same month in 2020

UK property transactions rose sharply in September 2021, with seasonally adjusted figures up 67.5% month-on-month to 160,950, according to the latest data from HM Revenue & Customs (HMRC).

HMRC said September’s figure was also 68.4% higher than the one recorded for the corresponding month in 2020. It estimated the provisional, non-seasonally adjusted figure for UK residential transactions in September 2021 at 165,720.

In September, the government brought to an end the temporary Stamp Duty Land Tax holiday in England and Northern Ireland that had been in place since July 2020. The measures incentivised buyers as they looked for properties with greater indoor and outdoor space on the back of the coronavirus pandemic.

Lawrence Bowles from the estate agents Savills said: “As if this year hasn’t been enough of a rollercoaster already, transaction figures released this morning show 166,000 homes changed hands in September. That’s 63% higher than the 2017-19 average.

“There’s more to this activity than a stamp duty holiday… record-low mortgage rates, desire for more space and a core of unmet pent-up demand all continue to push up transaction volumes.”

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20 October: ONS House Price Index Charts +10% Rise

• Average UK house price up 10.6% in year to August
• Average UK property now worth £264,244
• Annual price growth strongest in Scotland at 16.9%

Average UK house prices increased by 10.6% in the year to August 2021, up from 8.5% recorded a month earlier, according to the UK House Price Index from the Office of National Statistics (ONS).

The ONS said the average price of a UK property stood at £264,244 in August this year. This compares with £256,000 a month earlier.

At country level, the ONS said Scotland, at 16.9%, recorded the largest annual house price growth in the year to August 2021. This compared with 12.5% in Wales and 9.8% in England to the same date.

Regionally, around England, annual house price growth was highest in the North East where prices increased by 13.3% to August. This was followed by 12.4% in the North West and 11% in the West Midlands. 

London registered the lowest regional price growth over the past 12 months to August at 7.5%. 

However, this figure was more than three times greater than the 2.2% it recorded to July this year, prompting Lucy Pendleton, property expert at estate agents James Pendleton, to describe the rise as “quite a jump. The capital has turned a corner and we expect the London market to now mount a charge.”

Nicky Stevenson at estate agent Fine & Country said: “Just when you thought it was safe to predict the end of the housing boom, you get another dramatic spike in prices. 

“This data captures the final surge of the stamp duty holiday as buyers put their foot back on the gas to complete transactions before the end of the Chancellor’s tax breaks.”

18 October: Rightmove House Price Index Sees Records Broken

• Records broken across all GB regions for first time in 14 years
• Average property price hits all-time high of £344,445
• Monthly average price increase of 1.8% is largest in six years

Average property prices rose to record levels across every region in Great Britain this month, the first time this has happened since March 2007, according to the latest data from Rightmove.

The property portal’s house price index shows that the average price of properties coming to market jumped on average by £5,983 in October 2021. Rightmove said the month-on-month rise of 1.8% is the largest since October 2015. 

The company added that the increase was down to “strong housing market fundamentals and a window of opportunity to buy before a potential interest rate rise”.

Rightmove also reported record average price rises for the month across all British regions as well as all market sectors, namely, first-time buyers, second-step property purchasers and so-called ‘top-of-the-ladder’ buyers. The last time this happened was in March 2007.

Tim Bannister at Rightmove said: “This ‘full house’ is an extremely rare event. 2021 has been the year of the power buyer, with those in the most powerful position to proceed quickly and with most certainty ruling the roost over other buyers who have to sell but have yet to come to the market.

“Buyers being able to prove they are mortgage-ready or have cash in the bank helps them get up the pecking order. While available stock for sale is still close to record lows, there are signs that this has stopped falling and is stabilising this month, so fresh new choice is slowly growing.”

14 October: Total value of homes in Britain ‘tops £9 trillion‘

At-a-glance:

• Combined value of Britain’s homes is £9.2 trillion
• Market value has risen by £550 billion in 12 months
• Average British home worth £50,000 more than in 2016

Britain’s homes had a total value of £9.2 trillion on the open market this summer, according to property portal Zoopla. It said the combined value of Britain’s 28.6 million residential homes increased by £550 billion in the past year.

Zoopla said this was due to “soaring buyer demand as a result of the pandemic-led ‘search for space’ as well as the stamp duty holiday”.

It calculated that the total value of Britain’s 23.5 million privately-owned homes was £8.2 trillion in July this year. Zoopla said around £6.6 trillion of this figure was equity, with outstanding debt accounting for around £1.6 trillion.

Britain has a further five million affordable homes worth around another £1 trillion.

According to Zoopla’s figures, the average British property has risen in value by £49,257 over the past five years. More than two-thirds of homes in each of 53 local authorities around Britain have risen by a figure greater than this amount.

Topping the list was Monmouthshire where, according to Zoopla, 88.2% of homes have risen by more than the average. This was followed by Hastings (83.1%) and Trafford (82.2%).

The total value of housing in London stood at £2.4 trillion in 2021 making it the most valuable region. Behind the capital came the South East of England (£1.7 trillion) and the East of England (£1 trillion).

In terms of rising values over a five-year period, Zoopla said that the South East of England had outstripped all other regions.

UPDATE 7 October 2021: Halifax reports record average UK property price 

• Average UK property price £267,587 highest on record
• Annual house price inflation up to 7.4%
• Prices in Wales and Scotland continue to outpace UK average 

Average UK property prices reached another record high last month, according to Halifax.

The bank’s monthly house price index shows the average property was valued at £267,587 in September 2021. This is a 1.7% increase month-on-month compared with August’s figure of nearly £263,000, itself a record. 

Halifax said the latest monthly rate of growth is the largest since February 2007. It added that year-on-year UK house price inflation was 7.4% in September, reversing a three-month downward trend.

Wales continues to outstrip any other area in the UK with average annual house price growth of 11.5%,. Scotland (8.3%) also outperformed the UK national average. The South West (9.7%) remains England’s strongest performing region, while the weakest was the South East (7%). 

Russell Galley, Halifax’s managing director, said: “While the end of the stamp duty holiday in England and a desire among homebuyers to close deals at speed may have played a part in these figures, it’s important to remember that most mortgages agreed in September would not have completed before the tax break expired. 

“This shows that multiple factors, including the ‘race for space’, have played a significant role in house price developments during the pandemic.”

Miles Robinson at online mortgage broker Trussle said: “With so little housing stock across the country, it is likely that momentum will continue, and the market will remain active in the coming months. 

“The race for space, coupled with many companies still allowing employees to work from home, means countryside locations in particular are continuing to be extremely popular.”

UPDATE 30 September 2021: Nationwide House Price Index

At-a-glance

• Average UK house price is £248,742 in September, down 0.1% from August
• Annual house price growth stands at 10%
• Wales is strongest performing region, up 15.3% year-on-year

House price growth in the UK slowed sharply to 0.1% month-on-month in September, down from the 2.1% recorded in August.

According to the Nationwide’s House Price Index (HPI), annual house price growth fell back to 10% this month, down from 11% in August. The lender said the average home is now valued at £248,742, about 13% higher than before the pandemic began in early 2020.

Nationwide reported Wales as the strongest performing region, with house prices up 15.3% year-on-year, the highest rate of growth since 2004. Next best was Northern Ireland (14.3%), followed by Yorkshire & Humberside (12.3%), then Scotland (11.6%).

Robert Gardner, Nationwide’s chief economist, said: “Annual house price growth remained in double digits for the fifth month in a row in September, though there was a modest slowdown to 10% from 11% in August.

“House prices have continued to rise more quickly than earnings in recent quarters, which means affordability is becoming more stretched. Raising a deposit remains the main barrier for most prospective first-time buyers. A 20% deposit on a typical first-time buyer home is now around 113% of gross income, a record high,” Gardner added.

Miles Robinson, head of mortgages at our online broker partner Trussle, said: “The Nationwide index certainly indicates that the market is starting to contract, which is to be expected as the stamp duty holiday finally draws to a close this month. The growth rate for this month was marginal, but house prices have still increased 10% year-on-year, and demand still significantly outweighs supply.

“With such little housing stock across the country, however, it is very likely that momentum will continue, and the market will remain buoyant for several months to come,” he added.

UPDATE 28 September 2021: House Price Inflation Hits Young And Low Paid In Tourist Hotspots – ONS

At-a-glance:

• Rising prices and rents forcing low earners away
• Hospitality sectors struggling to recruit staff
• North Wales, Devon and Yorkshire seeing high inflation

The Office for National Statistics (ONS) is warning that rising house prices and private rents in rural and coastal areas are increasingly pricing low-paid and young workers out of areas where they live.

It says this has implications for hospitality businesses in these areas because it leaves them unable to fill job vacancies.

The ONS reported that house prices in locations such as Conwy in North Wales (25%), North Devon (22%) and Richmondshire in the Yorkshire Dales (21%), each rose at more than three times the national rate in July 2021.

In addition, areas including the Derbyshire Dales, Powys and Eden in Cumbria each recorded house price rises of 10% or more every month between January and July 2021.

By contrast, the seven areas that each recorded house price falls during July were all in London, including City of London, plus the boroughs of Westminster, Lambeth, Camden, Islington, Lewisham and Newham.

According to the ONS, workers in tourist hotspots earn less on average than people who live there. As an example, it referred to residents in the Cotswolds in April 2020 who earned nearly 29% more than people who were employed in the area.

The ONS added that there were similar differences between the earnings of residents and workers in other tourist areas such as the Derbyshire Dales (27%) and Allerdale (24%) in the Lake District. 

For full-time employees, the median hospitality salary in April last year was £22,779, a figure that was 28% lower than the national average of £31.461.

The ONS also said that hospitality workers were the most likely to be furloughed during the pandemic. As a result, tourist hotspots were among the areas with the highest average furlough rates during this period.

The government’s furlough scheme, which protected millions of jobs during this period, is to close on 30 September.

UPDATE 28 September 2021 – Zoopla House Price Index

At-a-glance:

• Average UK house price stands at record high of £235,000
• Prices up 6.1% in year to August 2021
• Wales records highest regional annual price growth at 9.8% 

UK house prices reached a record high last month, with the average property worth £235,000 according to the house price index from Zoopla, the property portal.

Zoopla reported annual house price growth of 6.1% in the year to August 2021. It added that the property market is moving at its fastest pace in five years, with homes consistently going under offer in less than 30 days since May this year.

Having removed a full-blown stamp duty holiday from England and Northern Ireland at the end of June, the UK government withdraws its remaining framework of tapered stamp duty reliefs at the end of this month.

Despite the removal of these reliefs, which have translated into savings for homebuyers of up to £15,000 per property, Zoopla reported that there had been “little evidence of a change to buyer behaviour” in recent months and “no sign of a cliff-edge of demand”.

At a regional level, Wales recorded the highest house price growth at 9.8% over the past year to August, followed by Northern Ireland (8.4%). 

Annual price growth among the UK’s major cities was highest in Liverpool at 9.8% and Manchester (8.1%). In last place came London with growth of 2.2%. According to Zoopla, the average house price in the capital now stands in excess of £500,000.

Gráinne Gilmore, Zoopla’s head of research, said: “The demand coming from buyers searching for space, and making lifestyle changes after consecutive lockdowns, has further to run.

“Balancing this, however, will be the ending of government support for the economy via furlough, and more challenging economic conditions overall, which we believe will have an impact on market sentiment as we move through the fourth quarter of this year.”

UPDATE 21 September 2021 – HMRC property transactions

At-a-glance

• Property transactions rebound in August 2021 following July’s sharp decline
• August’s figure up 20% compared with the same month last year 

UK property transactions bounced back in August 2021, with seasonally adjusted transactions up 32% from the previous month to 98,300, according to the latest data from HM Revenue & Customs (HMRC). 

HMRC said August’s figure was also 20% higher than the one recorded for the corresponding month in 2020. It estimated the provisional, non-seasonally adjusted figure for UK residential transactions in August 2021 at 106,150.

August’s data followed a month that saw transactions plummet by more than 60%. 

This month, the government will bring to an end the temporary Stamp Duty Land Tax holidays in England and Northern Ireland that have been in place since July 2020. The measures have incentivised buyers as they looked for properties with greater indoor and outdoor space on the back of the pandemic.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “The property market was just pausing for breath in July, and set off again in August, albeit at a slightly less frenetic pace.”

“The withdrawal of most of the stamp duty breaks at the end of June meant buyers made a dash for the finish line, leaving a gap in July. However, August’s figures show that this was a temporary pause rather than a full stop,” she added.

UPDATE 20 September 2021 – Rightmove House Price Index

• Average price of properties coming to market hits all-time high of £338,462
• Market “stock starved” but supply and demand forecast to balance out this autumn
• The rise of the ‘power buyer’ continues

The national average asking price of newly marketed properties rose this month to an all-time high of £338,462, according to the latest data from property portal Rightmove.

Rightmove said fierce competition among buyers has continued against the backdrop of a record low number of properties for sale, with the high ratio of buyer demand to properties for sale resulting in a continued “stock starved” market.

It added that the rise of the ‘power buyer’, those who have already sold their own homes, have cash in the bank, or are first-time buyers with a mortgage agreed, shows no signs of stopping. 

Tim Bannister, Rightmove’s director of property data, said: “Competition among potential buyers to secure their next home is now more than double what it was this time in 2019.”

“Agents report that buyers who have yet to sell are being out-muscled by buyers who have already sold subject to contract. Proof that you are mortgage-ready, or can splash the cash without needing a mortgage, will also help you to get the pick of the housing crop,” he added.

The property portal said there were signs that supply and demand for properties could start to balance out this autumn. The number of new listings posted on Rightmove in the first two weeks of September was 14% higher compared with the figure for the last two weeks of August.

Five areas of Great Britain: the South West, East Midlands, Wales, East of England, and the South East, each recorded annual house price growth in excess of 8%.

UPDATE 15 September 2021 – ONS House Price Index

• Average UK property now worth £256,000
• Average prices up 8% year-on-year
• Price growth strongest in Scotland over the past 12 months

Average UK house prices went into reverse in July this year after hitting record highs a month earlier, according to the UK House Price Index from the Office of National Statistics (ONS).

The ONS said that the average price of a UK property stood at £256,000 in July 2021. This compared with the £265,000 recorded in June.

Despite the month-on-month decline, the ONS said that average prices in July were up overall by around 8%, or £19,000, compared with a year earlier. The increase in June was 13.1%.

July’s house price fall coincided with the start of a tapering to the UK government’s Stamp Duty holiday incentive. Read more about the Stamp Duty Land Tax changes here. 

In March this year, the Chancellor announced an extension to the Stamp Duty holiday in England and Northern Ireland. This meant that the tax holiday was extended until 30 June 2021 after which the ‘nil rate’ threshold decreased from £500,000 to £250,000 until 30 September 2021. 

From 1 October 2021, the Stamp Duty thresholds will revert to what they were before 8 July 2020. The tax holiday for Scotland ended on 31 March 2021. The tax holiday in Wales ended on 30 June 2021.

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According to the ONS, the average house price in Scotland increased by 14.6% in the year to July 2021. In Wales the figure was 11.6%, while England recorded growth of 7%.

Regionally, the North East has enjoyed the strongest house price growth over the past year, with a figure of 10.8% to July.

Miles Robinson, head of mortgages at online mortgage broker Trussle, said: “A combination of the stamp duty holiday, low mortgage interest rates, increased demand for space and a lack of supply has created the perfect environment for sellers – but a very difficult market for buyers.

“The price decrease from June to July could signal a turning point in the market and a shift in the level of activity seen over the last year. If this is the case, it is certainly good news for those buyers who have missed out in the last six months.”

14 September 2021: Mortgage Broker Trussle Unveils Speed Promise Backed By £100 Offer

Forbes Advisor’s UK mortgage broking partner, Trussle, has announced its Mortgage Speed Promise, which will provide customers with mortgage advice within 24 hours and a mortgage decision within five days. Eligible customers who do not receive a decision within 5 days will receive £100 in compensation.

Trussle claims to be the first mortgage broker to offer a service that promises mortgage decisions to customers within five days.

It says it is trying to tackle the problems experienced by many would-be borrowers who find it difficult to get a timely mortgage decision from a lender, arguing that the pandemic has exacerbated the issue, with average mortgage approval times slowing down dramatically.

While some lenders such as Halifax are now back to pre-pandemic processing times of around three days, the broker says its internal data suggests other high street lenders can take 15 days or more.

Because of the lack of consistency in mortgage approval times among lenders, Trussle will only work with the UK’s fastest lenders to deliver on its five-day service commitment. Initially, nine lenders will be part of the promise including Halifax, HSBC, Barclays and Clydesdale.

Alongside this, Trussle is actively working with a wide range of lenders to improve their approval times and include them in its Speed Promise at a later date.

Ian Larkin, Trussle’s CEO, said: Buying a new home should be an exciting time, and so it’s such a shame that it’s considered one of the most stressful processes in life. Trussle was created to make mortgage applications easier and now we want to give our customers the certainty they desperately need at a very early stage in the process. 

“By using technology and automation to cut out needless hassle, we can give our customers decisions in days not weeks, without compromising on service, to hopefully bring some of that excitement back to buying a home.”

Borrowers will not be required to submit further documentation beyond what is currently required for a mortgage application, and a wide range of mortgage products with market-leading rates will be available, including high LTV, buy-to-let and remortgages. Any eligible customer who does not receive a decision within 5 days will receive £100 in compensation. Terms and conditions apply.

Update 7 September 2021: Halifax sees record average UK property price at £263,000

At a glance…

• Average UK property price £262,954, highest on record
• Figure is £23,600 higher than June 2020
• Annual house price inflation eases to 7.1%

Halifax bank’s monthly house price index for August confirms that UK property prices are continuing to rise, although the rate of annual increase, at 7.1%, is down from the 7.6% recorded in July.

The month-on-month increase was 1.2%.

The bank says the average UK property price stands at £262,954, which is a record high. The previous peak was in May (£261,642). Demand has been fuelled in recent months by changes to stamp duty rules, including the ending of the tax holiday in Wales and the tapering of relief in England.

You can find out more about stamp duty rates and rules here.

Russell Galley at Halifax said there are other significant factors driving house price inflation: “Structural factors have driven record levels of buyer activity, such as the demand for more space amid greater home working. 

“These trends look set to persist and the price gains made since the start of the pandemic are unlikely to be reversed once the remaining tax break comes to an end later this month.”

Mr Galley added that economic conditions will continue to to support property prices: “The macro-economic environment is becoming increasingly positive, with job vacancies at a record high and consumer confidence returning to pre-pandemic levels. 

“Coupled with a supply of properties for sale that looks increasingly tight, and barring any reimposition of lockdown measures or a significant increase in unemployment as job support schemes are unwound later this year, these factors should continue to support prices in the near-term.”

In terms of regional variances, Halifax says Wales is the strongest performing area, with annual house price inflation at 11.6% – the only double-digit rise recorded in the UK during August. 

South-west England is also still experiencing strong growth at 9.6%, reflecting demand for rural living within the region. 

Price inflation in Greater London continues to lag the rest of the country, according to the Index, registering a 1.3% annual increase in prices in August. Over the latest rolling three-monthly period, the capital was the only region or nation in the UK to record a fall in prices (-0.3%). 

The year-on-year rise in London was also the weakest seen in 18 months, says Haliax, though it notes that the average price in the capital – at £508,503 – remains far above the average national price.

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UPDATE 2 September 2021: Nationwide cuts mortgage rates to ‘lowest-ever’ 0.87%

Nationwide is launching its lowest-ever mortgage rate for new lending after cutting its fixed and tracker range rates by up to 0.40%, to below the psychological 1% barrier

Those with a 40% deposit will be able to take advantage of a two-year fixed rate mortgage at just 0.87% or a two-year tracker at 0.99%. However, the deals come with hefty fees of £1,499 and £999, respectively.

Elsewhere, the building society is offering a 75% LTV deal at 1.00% with a £1,499 fee and a two-year fix for first-time buyers holding a 5% deposit at 2.99% (down from 3.24%) subject to a £1,499 fee. Nationwide’s first-time buyer mortgages come with £500 cashback.

The reductions haven’t just been reserved for new buyers though – remortgagers can also get the 0.87% rate on a two-year fix at 60% LTV – again for a fee of £1,499. 

The biggest price cut in its remortgage range is on the building society’s two-year tracker mortgage at 60% LTV at 0.99% (down from 1.39%).

Henry Jordan at Nationwide said: “These latest reductions will offer those looking for a new deal one of the best rates available. However, reductions have been made at all loan to value levels so whether someone is buying a new home, remortgaging their existing property or getting a further advance to improve their home we have a range of mortgages on offer to suit their needs.”

Rates below 1% – but watch for high fees

Despite being the lowest rates Nationwide has ever offered, a spate of new sub 1% deals have recently come to the market from rival lenders – one of which is lower still.

Halifax has a two-year fixed rate mortgage at 0.83% with a £1,499 fee or a higher rate of 0.87% if you pay a lower fee of £999. Both are for purchases only, though, and require a 40% deposit.

Rates continue to fall as lenders try to get more people on their books amid the post-pandemic property boom – despite the fact that the Stamp Duty Land Tax holiday in England, which incentivised so many buyers since July 2020, will expire at the end of September.

Not everyone will be eligible for a sub 1% mortgage deal, since offers are subject to status. Lenders will want to see that you’re a responsible borrower with a good track record of managing credit in the past.

The relatively high fees of £1,499 attached to some of these sub 1% mortgages might not be cost-effective if you need a relatively small mortgage. In fact, depending on how much you need to borrow, you may be better off choosing a no-fee deal with a slightly higher rate.

Also, if you’re currently tied into a fixed rate mortgage and want to take advantage of a competitive new deal, you may be penalised with early repayment charges that could wipe out any benefits from switching. 

And remember, rates could continue to fall, so if you sign up for one of the new cheap fixed-rate deals now, you won’t be able to jump ship when something cheaper potentially comes along without incurring penalty charges.
To see how much your repayments would be with one of Nationwide’s new deals or any other mortgage product, try our new mortgage calculator tool.

UPDATE 1 September 2021 – Nationwide House Price Index

At-a-glance…

• Average UK house price was £248,857 in August, up 2.1% from July
• Second largest gain month-on-month in 15 years
• Annual house price growth stands at 11%

House prices rose by 2.1% in August, the second largest month-on-month gain in 15 years, despite predictions that the recent scaling back of stamp duty reliefs would subdue demand in the UK’s property market.

According to the Nationwide House Price Index, annual house price growth rose to 11% in August 2021 with the average home valued at £248,857. Nationwide added that house prices are now about 13% higher than when the pandemic began.

Nationwide described the August increase as “surprising” following the tapering of stamp duty reliefs at the end of June. 

Robert Gardner, Nationwide’s chief economist, said: “The strength may reflect strong demand from those buying a property priced between £125,000 and £250,000 who are looking to take advantage of the stamp duty relief in place until the end of September, though the maximum savings are [now] substantially lower.

“Lack of supply is also likely to be a key factor behind August’s price increase, with estate agents reporting low numbers of properties on their books. Activity will almost inevitably soften for a period after the stamp duty holiday expires at the end of September.”

Miles Robinson, head of mortgages at online mortgage broker Trussle, said: “Today’s results will come as a surprise as many expected to see a contraction in the market as the stamp duty holiday (in England) draws to an end. However, while unprecedented demand has meant sellers have very much been in the driving seat this past year, there are now some great opportunities for would-be house hunters. In particular, next-time buyers who have equity or larger housing deposits can take advantage of some incredibly competitive interest rates.”

Nicky Stevenson, managing director of national estate agency chain Fine & Country, said: “While the stamp duty holiday savings on big homes are quickly vanishing, a greater proportion of market activity is now in the mass market sector, buoyed by the resurgence of buy-to-let investing and first-time buyers.”

UPDATE 26 August 2021 – Zoopla notes ‘acute shortage’

At-a-glance

• Properties selling almost twice as quickly as in 2019
• Price growth highest in Wales and Northern Ireland

The UK property market faces an “acute shortage” of homes for sale, after a record number of transactions to beat changes to the temporary stamp duty regime used up available stock, according to the property portal Zoopla.

Latest figures from the firm’s House Price Index showed that the number of properties for sale in June dropped by 26.4% compared with the 2020 average.

Zoopla said buyer demand remains strong, up 20.5% compared with the 2020 average. The figures also showed that competition among buyers intensified through the second half of 2020 and into 2021. 

It said the average time to sell, measured as the time taken between a property being listed and a sale being agreed, now stands at 26 days, down from 49 days in 2019.

At a regional level, property price growth around the UK over the past year was highest in Wales (up 9.4%), Northern Ireland (9%) and the north west of England (7.9%). In terms of city locations, Liverpool led the way with price growth of 9.4%

Zoopla said first-time buyers have been increasingly active in 2021, supported by lenders that have reintroduced products accommodating higher loan-to-value (LTV) mortgages. See below for comment on the impact of LTV deals.

Maximum LTV mortgages ‘failing to secure market share’

• 95% mortgages accounted for just 1% of mortgages in July
• 49 lenders offer 95% mortgage deals

According to research from our mortgage partner, Trussle, the recent crop of 95% loan to value (LTV) mortgages coming to market is not resulting in successful applications from would-be borrowers. 

The online broker has seen interest in 95% LTV deals account for a quarter of all its mortgage enquiries in recent months, but says that just 1% of its mortgage completions were from 95% mortgages in July 2021. It attributes this to the fact that high LTV mortgages are subject to stricter lending criteria and require higher credit scores.

Additionally, many lenders do not accept ‘gifted deposits’ (where the borrower uses funds given to them by their parents, for example) on 95% LTV deals. Also, some property types like flats and new builds are ineligible for the 95% deals on offer.

Trussle says there are currently 49 lenders offering 95% LTV mortgages, with the number of lenders steadily increasing since March. Its data shows that 60% of all leads for 95% mortgages were first time buyers, with ‘next time’ buyers (34%) and remortgages (6%) making up the rest.

While 95% mortgages are struggling to make an impact on the market, Trussle says other high LTV mortgage brackets are seeing significant demand from consumers. For example, 90% mortgages have been a popular choice for those needing higher LTV products, accounting for 10% of Trussle completions in June 2021, the highest since August last year.

UPDATE 24 August 2021 – HMRC property transactions

At-a-glance

• Property transactions plummet by 63% month-on-month
• Reduction in stamp duty relief triggers decline

UK monthly property transactions fell dramatically in July 2021, with seasonally adjusted transactions for July standing at 73,740, a 62.8% drop compared with the figure reported in June, according to the latest data from HMRC.

The fall coincided with the tapering of a temporary, pandemic-enforced reduction in Stamp Duty Land Tax at the end of June in England and Northern Ireland.

Until 1 July, the first £500,000 of a property purchase was exempt from stamp duty. This figure now stands at £250,000 and will be reduced again, to £125,000, from 1 October 2021.

The end of June also marked the end of the temporarily increased nil rate band to £250,000 for residential Land Transaction Tax in Wales. It has reverted to £180,000.

HMRC estimated the provisional non-seasonally adjusted figure for UK residential transactions in July 2021 at 82,110. 

Adam Forshaw at conveyancing firm O’Neill Patient said: “It was to be expected that housing transactions would be lower in July, but 62.8% is quite a drop. Having said that, June was a record month as the conveyancing industry worked hard to get as many house sales over the line before the first phase of the stamp duty holiday ended.

“We are still seeing a good level of instructions in house sales and purchases as people are still eager to beat the final stamp duty holiday exemption on 30 September.”

UPDATE 18 August 2021 – ONS House Price Index

At-a-glance:

• Average UK property now worth £265,668
• Price growth strongest in north west of England
• Transactions in June 219% higher than 2020

The average price of a UK property was £265,668 in June 2021, according to the UK House Price Index from the Office of National Statistics (ONS).

The ONS said that, on average, property prices rose by 13.2% in the year to June 2021. 

It added that the strongest house price growth achieved over that period had been recorded in the north west of England with a return of 18.6% in the year to June.

Elsewhere around the regions, London recorded the most sluggish rise in annual growth returning a figure of 6.3% over the same period.

Figures from UK Property Transaction Statistics estimated that 198,240 transactions took place on residential properties worth £40,000+ in June 2021. This was a 219% increase on the same month a year ago.

Miles Robinson at online broker Trussle, said: “House price growth remains strong with an average increase of 13.2% over the year to June 2021. Much of this can of course be attributed to the buyers and sellers who grappled to complete before the 30 June higher threshold stamp duty deadline.”

“While house prices have increased on average, the industry is starting to see a slow-down in the rate at which property value is appreciating. With the stamp duty deadline coming to a complete close in the nearing weeks, it is likely that house price growth will start to cool off slightly,” Robinson added.

UPDATE 16 August 2021 – Rightmove House Price Index

At-a-glance

• Average asking price of properties coming to market down £1,076, a 0.3% dip
• Prices of larger properties slip by 0.8%
• Demand remains high for ‘mass market’ properties 

House asking prices fell for the first time in 2021, according to the latest data from property portal Rightmove.

The firm said the average price of property coming to market in August dipped by £1,076, a decrease of 0.3%. 

Rightmove explained that the slight cooling was mainly driven by a 0.8% fall in the price of upper-end, four-bedroom-plus properties, a result of the tapered stamp duty holiday which comes to an end next month.

It added, however, that first-time buyer and second-stepper properties – each less affected by the withdrawal of most stamp duty initiatives – continued to rise in price by 0.6% and 0.3% respectively.

The portal said that overall demand from buyers remains strong and suggested this could prompt an Autumn “bounce” in both prices and seller activity.

Tim Bannister, Rightmove’s director of property data, said: “New sellers dropping their asking prices can ring economy alarm bells, especially when it’s the first time so far this year.

“It’s important to dig underneath the headline figures. We are in the holiday season which means that sellers have traditionally tempted distracted buyers with lower prices. Our analysis shows that average prices have only fallen in the upper-end sector, which is usually more affected by seasonal factors such as the summer holidays.”

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Trussle is a 5-star Trustpilot rated online mortgage adviser that can help you find the right mortgage – and do all the hard work with the lender to secure it. *Your home may be repossessed if you do not keep up repayments on your mortgage.

UPDATE 6 August 2021 – Halifax UK House Price Index

At-a-glance

• Average UK house price stands at £261,221 in July 2021, up 0.4% from June
• Annual house price growth slowed to 7.6%
• Wales records strongest house price growth for 16 years

UK house prices rose by 0.4% in July, with the average property now worth £261,221, according to the Halifax House Price Index.  

Halifax reported a fall in annual house price growth to 7.6% in the 12 months to July 2021. 

The lender said this easing was to be expected for two reasons. First, the price inflation experienced by the property market last summer as it emerged from the first lockdown and, second, the buying activity prompted by the government’s time-limited stamp duty holiday initiative.

According to the Halifax, Wales recorded an annual house price increase of 13.8% to the end of July, its strongest growth figure since 2005. The North West England, Yorkshire and Humberside, and the South West also posted double-digit rises year-on-year.

Russell Galley, the Halifax’s managing director, said: “Recent months have been characterised by historically high volumes of buyer activity, with June the busiest month for mortgage completions since 2008. This has been fuelled both by the ‘race for space’ and the time-limited stamp duty break.

“With the latter now entering its final stages, buyer activity should continue to ease over the coming months, and a steadier period for the market may lie ahead,” Galley added.

Miles Robinson, head of mortgages at Trussle, the online mortgage broker, said: “There are many positives for homeowners to take from the market at the moment. An increasing number of high-profile lenders are now offering sub 1% mortgage products, with some available on a fixed-term rate for up to five years.”

UPDATE 2 August 2021 – Londoners flock to buy homes outside capital

At-a-glance

• Record number of Londoners buy homes outside capital
• Properties located on average 34.6 miles from capital
• Pandemic-fuelled city ‘out-migration’ shows no sign of stopping

Londoners bought a record number of homes outside the capital in the first six months of 2021 according to estate agent Hamptons.

The firm said Londoners have led the way in “city out-migration”, one of the key property market trends of the pandemic. Between January and June 2021, Londoners bought 61,830 homes outside the capital, with properties located an average 34.6 miles away from the capital.

Hamptons said this was the highest half-year figure since its records began in 2006. Putting the figure into context, the estate agency said it was only 10,030 homes fewer than those sold in London during the whole of 2020.

On average, Londoners paid £389,975 for their new properties. 

So far this year, Londoners made up 8.6% of all buyers outside the capital. This was the highest proportion on record and up from the 6.6% reported over the same period last year.

Aneisha Beveridge, head of research at Hamptons, said: “Pandemic-fuelled city out-migration shows no sign of slowing. Despite lockdown easing and offices and restaurants re-opening, Londoners have continued to re-evaluate where they want to live.

“The capital’s loss has been the Home Counties’ gain. The mix buying beyond the capital has changed, with first-time buyers more likely to leave London than ever before.”

UPDATE 28 July 2021 – Nationwide House Price Index

At-a-glance

• Average UK house price stands at £244,229 in July 2021, down 0.5% from June 
• Annual house price growth slowed to 10.5% 

House prices fell by 0.5% in July thanks to the tapering of stamp duty relief in England and the ending of the duty holiday in Wales.

According to the latest Nationwide House Price Index, annual house price growth slowed to 10.5% in July 2021, having peaked at a 17-year high of 13.4% a month earlier. It described July’s reverse as a “modest fallback”, saying this is unsurprising given the significant gains recorded in recent months. 

Robert Gardner, Nationwide’s chief economist, said: “House prices increased by an average of 1.6% a month over the April to June period, more than six times the average monthly gain recorded in the five years before the pandemic.

“The tapering of stamp duty relief in England is likely to have taken some heat out of the market. This provided a strong incentive to complete house purchases before the end of June.”

Nationwide said stamp duty changes drove the number of housing market transactions to a record high of almost 200,000 in June as homebuyers rushed to meet the deadline. This was around twice the number of transactions recorded in a typical month before the pandemic and 8% above the previous peak seen in March 2021.

UPDATE 27 July 2021 – Savills predicts 9% price growth

At-a-glance

• Savills predicts 9% UK house price growth for 2021
• Prices set to rise by 21.5% over five years to 2025
• Property markets in the Midlands and the North-East of England expected to perform best

Estate agency Savills has predicted that UK house prices will rise by 9% in 2021 thanks to a combination of factors including extended stamp duty holidays, plus the impact of repeated lockdowns on what buyers want from their homes.

Savills said it also expects average house prices to rise by a further 3.5% next year and by a total of 21.5% in the five years to the end of 2025.

Since the property market re-opened last year after the first phase of the pandemic, Savills said price growth had been driven in large part by more affluent buyers, less reliant on mortgage debt and able to lock into low, fixed interest rates. Homes featuring plenty of space, both inside and out, have been high on buyers’ wish lists over the past year.

According to Savills, the property markets of both the Midlands and the North of England are anticipated to show the strongest price growth. It said both regions could sustain a rise in house prices before homes in these areas become unaffordable.

Lucian Cook, Savills’ head of residential research, said: “Some of the growth generated by the extraordinary market conditions of 2020 and 2021 could unwind during 2022, but we see nothing on the horizon that would trigger a major house price correction.

“New buyer demand continues to outweigh supply. This imbalance looks set to continue,  underpinning further price growth over the near term, particularly as people look to lock into current low interest rates,” he added.

UPDATE 27 July 2021 – Zoopla House Price Index

At-a-glance

• Average UK house price stands at a record £230,700
• House prices up 5.4% in the year to June 2021
• Northern Ireland records highest house price growth in past year

UK house prices reached a new high last month, with the average property now worth £230,700, according to the house price index from Zoopla, the property portal.

Zoopla reported a 25% fall in the number of homes for sale in the first half of this year compared to the same period in 2020, resulting in what it describes as a “severe shortage” of housing stock. This has helped push up house prices by an average of 5.4% in the year to June 2021, it said.  

At a regional level, Northern Ireland recorded the highest house price growth at 8.6% over the past year, followed by Wales at 8.4%. The North West was responsible for England’s highest growth figure at 7.3%. In London, prices rose by 2.3% in the past 12 months. 

Zoopla said it expected price growth to edge up to 6% in the coming months before easing back by the end of the year once the impact of the extended stamp duty holiday has unwound. 

Grainne Gilmore, Zoopla’s head of research, said: “Demand for houses is still outstripping demand for flats. There is a continued drumbeat of demand for more space, both inside and outside, among buyers funnelling demand towards houses and resulting in stronger price growth for these properties.”

UPDATE 21 July 2021 – HMRC property transactions

At-a-glance

• Property transactions break record as buyers scramble to beat stamp duty deadline

UK monthly property transactions soared to record figures last month as would-be buyers scrambled to complete purchases ahead of changes to the rules on stamp duty. Seasonally adjusted transactions for June stood at 198,240, according to the latest data from HMRC. 

The figure was 219% higher compared with the same month in 2020 when the effects of the pandemic impacted heavily on the property market. Last month’s figure was also 74% higher than the one recorded for May 2021, according to HMRC.

HMRC estimated the provisional non-seasonally adjusted figure for UK residential transactions in June 2021 at 213,120. This was the highest monthly figure since records began in 2005.

Last month’s flurry of activity coincided with an end to the temporary, pandemic-enforced rules on Stamp Duty Land Tax which had been in place until 30 June 2021 in England and Northern Ireland. 

Until the end of June, the first £500,000 of a property purchase was exempt from stamp duty. This figure was subsequently cut to £250,000 from 1 July and will be reduced again, to £125,000, from 1 October 2021.

In Wales, the Land Transaction Tax holiday came to an end on the same day, with the exemption falling from £250,000 to its permanent level of £180,000.More information on stamp duty changes around the devolved nations can be found here.

UPDATE 19 July 2021 – Rightmove House Price Index

At-a-glance:

• Average price of properties coming to market at all-time high of £338,447
• Average price up by more than £21,000 since start of 2021
• Shortfall of 225,000 properties for sale

“Frenzied” UK housing market activity in the first half of 2021 pushed the average price of newly-listed properties to a record-breaking £338,447, according to the latest data from property portal Rightmove.

The firm said a record figure had been achieved in each of the past four months. The average property price is now £21,389 (6.7%) higher than at the start of 2021. 

In May to June 2021 alone, the average property price rose by £2,374. Rightmove said this was the largest increase recorded at this time of year since 2007. 

Rightmove added that the combination of 140,000 sales being agreed in the first half of 2021, plus 85,000 fewer listings compared with the long-term average, had produced a shortfall of 225,000 homes for sale.

Detached homes with four or more bedrooms have experienced the largest imbalance in terms of supply and demand since the start of 2021, with a 39% surge in sales but a 15% fall in numbers. 

Rightmove estimated that the average number of available properties for sale per estate agency branch is now at a record low of 16.

Tim Bannister, Rightmove’s director of property data, said: “New stamp duty deadlines in England and Wales for sales completed by the end of June helped to exhaust the stock of property for sale and concentrate activity.”

UPDATE 15 July 2021 – ONS UK House Price Index 

At-a-glance:

• Average UK property now worth just under £255,000
• Annual house price growth strongest in north west of England, sluggish in London
• Property transactions for May 2021 138% higher than a year earlier

The average price of a UK property was £254, 624 in May 2021, according to the UK House Price Index from the Office for National Statistics (ONS).

The ONS said that, on average, property prices had risen by 10% across the UK in the year to May 2021.

It added that the strongest house price growth over that period had been recorded in the north west of England with a return of 15.2%. London, meanwhile, recorded the most sluggish rise in annual growth returning a figure of just 5.2% in the year to May. 

According to the Bank of England, mortgage approvals stood at 87,500 for May 2021. The figure was up slightly from the previous month, but lower than the recent peak of 103,400 reported in November 2020.

Figures from UK Property Transaction Statistics estimated that 114,940 transactions on residential properties worth £40,000 had taken place in May 2021. This was a 138% increase in the figure recorded for the same month in 2020. 

UPDATE 7 July 2021 – Halifax UK House Price Index

Property prices fell in June for the first time since January, suggesting the UK housing market may be reacting to changes in the UK’s land tax regimes.

The average house price slipped to £260,358 last month, according to the latest data from the Halifax House Price Index. The figure was down 0.5% from the 14-year high of £261,642 recorded in May this year. 

However, the June figure is still £21,000 higher than it was at the same time last year – a year-on-year increase of 8.8%.

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Halifax said the strongest regional growth over the past 12 months was recorded in Wales (12%), Northern Ireland (11.5%) and the north-west of England (11.5%).

Russell Galley at Halifax said: “With the Stamp Duty holiday now being phased out (in England and Northern Ireland), it was predicted the market might start to lose some early steam entering the latter half of the year. 

“It’s unlikely that those with mortgages approved in the early months of the summer expected to benefit from the maximum tax break, given the time needed to complete transactions.”

Forbes Advisor UK’s mortgage partner, broker Trussle, says there may still be time for people in certain English postcodes to complete their purchase before the final changes take effect on 30 September.

Between now and then, the Stamp Duty nil rate band stands at £250,000. It will revert to £125,000 from 1 October.

The holidays on the equivalent duties ended in Scotland on 31 March and in Wales on 30 June.

Miles Robinson at Trussle said: “While house prices have stalled month-on-month, it’s important to remember that annual growth remains strong. This is because prices have been driven by an imbalance between demand and supply for the past year.”

Nicky Stevenson at estate agents Fine & Country said: “The housing market has been running on rocket fuel for some time, but this is evidence that things may finally be starting to plateau. But there’s no suggestion we’re now facing a nosedive. Annual price rises across most of the UK remain impressive and make growth in previous years look rather mundane.”

https://www.forbes.com/uk/advisor/personal-finance/2022/07/18/house-prices-updates/