UK house prices have hit a record high
Average UK house price up more than £55,000 in past two years
Annual price growth of 10.2% from May last year
UK house prices have hit a record high, rising by 2.1% to £367,501 from last month to this, says Rightmove.
Property prices have increased £55,000 in the last two years, compared to a £6,000 rise in the two years prior to the Covid pandemic, Rightmove’s latest monthly house price index shows.
There was an annual price growth of 10.2% from May last year to this.
The increase of 2.1% this month is the biggest at this time since May 2014, reports Rightmove.
Strong buyer demand
Demand is still strong with the number of buyers getting in touch with estate agents this month 31% up on the “normal” market of 2019. However, this is slightly below demand last year, by 14% year-on-year.
Tim Bannister, Rightmove’s Director of Property Science, 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. Though demand is softening from the heady levels we saw this time last year, the number of buyers enquiring is still significantly higher than during the last ‘normal’ market of 2019, while the number of homes for them to choose from remains more constrained. We anticipate that the effects of the increased cost of living and rising interest rates will filter through to the market later in the year, and a combination of more supply of homes and people weighing up what they can afford will help to moderate the market.”
Two and three-bedroomed semi-detached homes “desperately” needed
The Rightmove index also highlights that new stock is “desperately” needed, particularly for two and three-bedroomed semi-detached homes, with the number of properties available down 16% against last year and 55% against 2019.
The average monthly mortgage payments are now more than rental payments following four consecutive interest rate rises, Rightmove also reports. The average monthly mortgage payments are currently £901 against an average monthly rental payment of £887. This has hit single first-time buyers hardest as they now require a 34% deposit compared to a 25% deposit 10 years ago, Rightmove states.
Tim Bannister said: “This new analysis shows how it has become increasingly difficult for an average first-time buyer to afford a home on their own. The historic average mortgage payments for a first home provide some good context to the current backdrop of rising interest rates and help explain why so many people take out fixed-rate mortgages. As interest rates are predicted to rise further during the course of 2022, many buyers will be looking to lock in mortgage deals now before further rate rises. With so many variables affecting house prices and affordability, the market is extremely difficult to predict, and those looking to buy will be prioritising their own needs and what they can afford rather than waiting to try and time the market.”
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