Housing Market Update

Housing Market Update.

Figures released by the Office for National Statistics show the average house price in the UK leapt last month with a considerable increase of 12.4%. With the typical property now at a record high of £294,845, can buyers now afford the market? Coupled with the new cost of living, is now the best time to purchase?

Waiting for a better time to buy could prove risky, as discussed recently in Sky news. There is no guarantee that house prices are going to fall, and with interest rates skyrocketing, mortgages are becoming more and more unaffordable. This is coupled with rising food and petrol prices. It questions whether it would be worth waiting for a better time to buy.

In fact, Halifax, one of the country’s biggest mortgage lenders, said that the market “defied any expectations of a slowdown”. Russell Galley from Halifax, in fact, mentioned that “higher earners are likely to be able to use extra funds saved during the pandemic”. Another report, states “surveyors say they are seeing evidence that the housing market is starting to cool”. However, a report from The Royal Institution of Chartered Surveyors (RICS) found that 27% of professionals reported a fall in interest from potential house buyers. This was the “third consecutive month” that interest from new buyers dropped.

An article from Sky News says that properties listed at up to £500,000 are ‘more likely’ to be sold at above asking price. Thirty-nine percent of houses listed at between the threshold £500,000 and £1m are sighting a sales price, beating the asking price. A report from RICS contained comments from surveyors, one of which commented that there is “”still demand for competitively priced properties”.

In a comment by Rightmove, however, it discusses a drop to a normal level. This could possibly a blamed on inflation and rising living costs.  First-time buyers could be affected and may “seek some financial certainty by locking in longer fixed-rate mortgage terms now before their monthly outgoings increase again”.

With uncertainty on the cards for the housing market and with the state of political affairs, will house prices, due to inflation and unaffordability, now see a decline in the latter half of this year?

Should you be looking to sell or purchase a property, please do not hesitate to contact Megan Manfield, who is based at our Bury St Edmunds office, on 01284 755771 or megan.manfield@rudlingsllp.co.uk.

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