According to the latest House Price Index from Zoopla, house prices in April of this year hit a record high with the average cost of a UK property exceeding £250,000 for the first time, reaching £250,200.
During the year to the end of April 2022, the average cost of a UK home went up 8.4% compared to the annual rate of 9% recorded in March – showing that market could be finally slowing down. The time taken to sell a home in the UK has increased and even though the market is stabilising, it is not anticipated that house prices will fall.
Average UK property values went up by only 0.2% in April compared to monthly gains of 0.7% at the beginning of 2022. Wales saw the strongest house price increase at an annual rate of 11.6% in April – in February it was 13%. In Scotland, house prices went up by nearly 7%. Growth in London was the lowest in the UK at just 3.6%.
Although the market is showing signs of slowing, demand is still outweighing the current supply of properties for sale. The number of buyers is still 61% higher than the five-year average. In contrast, the number of homes for sale is currently 37% lower than normal. However, this is starting to increase – the number of new property listings in the month to 22nd May were 7% higher than the give-year average. In addition, homes took longer to sell than they did in the previous month – and this applies to all property types.
There has also been an increase in the number of properties that have been reduced in price by at least 5%.
The latest House Price Index shows that the market is calming down and as a result, sellers are more realistic about how much their property is worth. The number of properties for sale is increasing which is providing more choice.
For those looking to trade up the property ladder it’s also good news as there is more choice and more willingness for sellers to reduce their price. Similarly, if you are selling first, you may have to reduce your price if your home is not getting much interest.
It is expected that during the second half of this year, higher interest rates and rising living costs will act as a break on the property market. Mortgage rates are currently higher than they were at the end of last year and the average income required to secure a mortgage on a property worth £250,000 has increased by £4,500 when putting down a 30% deposit and borrowing 4.5 times your salary.
The time taken to sell a property is rising and this is expected to increase further.
With mortgage rates going up, now could be the time to talk to us about your options. Give us a call on 01698 200050.