House Prices Continue to Rise

Despite concern about the increase in interest rates and inflation, due to the current lack of stock on the property market, houses prices are continuing to rise.

Due to the current ongoing concern about rising interest rates, inflation, and the increase in the cost of living, there has been increasing speculation about how this could have an affect on house prices.

In October 2022, despite the mounting concern about the cost of living, the average asking price of a home in the UK has in fact increased once again, thereby hitting another new record of £371,158. Although this is a smaller increase than seen previously in September 2022, and slightly lower than the five-year average usually expected in October, it’s still a positive and reassuring sign for those looking to sell their homes.

It would appear therefore, that the main reason house prices have risen again in October, is the severe lack of stock on the property market, which means there continues to be more people looking to move, than there are homes up for sale. This would also indicate that new sellers who have been listing their homes on the property market over the past month, have not felt it necessary to lower their asking price due to the lack of availability caused by the current shortage of property.

According to Rightmove Director, Tim Bannister “What’s going to happen to house prices is likely to be on the minds of many home-movers right now, especially following the market uncertainty after the Government’s mini-budget. There has been no immediate effect on average prices, but we’re seeing yearly growth in asking prices continue to soften.”

Since the start of 2022, there has been slightly less demand from home-buyers compared to the previous extraordinarily busy two years (2020 – 2021) which were directly impacted by the urgency the Covid Pandemic created.

During this time, the industry saw a demand for more properties with enough room for office space, to enable people to work from home when required and also somewhere with outside space – either a garden or balcony (the race for space!). But since most people have started returning to their place of work, this urgent need for extra space has decreased and the housing market has reverted to the normality last seen pre-pandemic - back in 2019.

Demand from first-time buyers was 21% lower in these last two weeks compared with 2021, but was still significantly higher than in 2019, according to Rightmove. They also claimed that some new movers had paused their plans in the face of uncertainty over prices and rates.

Encouragingly however, the vast majority of agreed sales were still going ahead, with some buyers accelerating the process to ensure they could proceed with lower fixed-rate mortgage offers before they expired.

In addition,there are still more people looking and needing to move than there are homes available for sale, which has continued to push prices up due to this ongoing lack of stock.

“It’s understandable that some new movers who have the option to wait, may want a clearer view than they’re getting right now for a major purchase such as a home,” according to Tim Bannister.

“With uncertainty over where mortgage interest rates will go, those who can still afford to proceed may decide that waiting too long could come at an even higher cost than taking action to move now, especially if the level of demand continues to outstrip the number of homes available to buy, which will support house prices,” he adds.

As is expected in November and December, it is considered likely that there will be the usual seasonal drop in the average asking price. Whilst all eyes will be on Jeremy Hunt’s full budget announcement on 31^st October, for the time being, any forecasts for the 2023 housing market will be purely speculative.

If you are thinking of selling your property, please call our Sales Team today for a free market appraisal on 020-7619-3750 (Archway), 020-7354-9111 (Highbury) or 020-7281-2000 (Stroud Green), or email info@davidandrew.co.uk