The year 2022 began with average house prices continuing to rise at pace, still being supported by low-interest rates, a stamp duty holiday, and strong demand from homebuyers outweighing supply.
Office for National Statistics data revealed that the average UK property price was £281,000 in April 2022, which was £31,000 higher than in April 2021. Further to this, Halifax data revealed that by August, property prices had increased by nearly 23 percent to a new record high of £293,992.
The South East of England recorded one of the biggest price increases nationally, up by £28,068 over the last 12 months to the end of November. This is partly due to various urban regeneration projects taking shape in the region, and the Elizabeth Line prompting homebuyers to consider up-and-coming towns such as Slough as a suitable location for buying property. In fact, the region is one of our top property hotspots for homebuyers.
However, according to Mrs. Monica Efe Osaghae, Managing Director, Efe Enterprises, the price of dollars has started being the determinant factor for the price of property in Nigeria. According to her, prices of houses are now being paid in dollar in Nigeria. “This is most unfortunate because the naira is being relegated to the store without much value. It is wrong to use foreign currency as a means of buying and selling in the country with its own sovereignty,” she said
In response to increasing pressures for homebuyers, the government moved quickly to stimulate demand in the property market by extending its 95 percent Mortgage Guarantee scheme – which was due to end in December – by a further year. This allowed first-time buyers and current homeowners looking to move to benefit from smaller deposits in the face of higher property prices and the cost-of-living crisis.
However, the pace of property price growth began to slow slightly from August onwards, and, by November, prices were considerably steadier than previous months. Meanwhile, the cost-of-living crisis resulted in more caution in the UK property market. At the same time, new Chancellor Jeremy Hunt announced in November that stamp duty cuts in the mini-budget would remain in place until the 31st of March 2025, having recently increased the threshold from £125,000 to £250,000. This has helped to stimulate the homebuyer market as people look to take advantage of lower taxes and will continue to help maintain a high level of demand throughout 2023.
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By the last quarter of 2022, all regions had recorded slightly lower annual price growth, but still comparatively higher than the same period in 2021. December saw price growth steady to 2.8 percent, down from 4.4 percent in November, and this coincided with the Bank of England raising the base rate to 3.5 percent, in response to rising inflation levels. Because of this, mortgage offers dwindled momentarily, but quickly began to recover in the first quarter of 2023 as buyer demand remained high and uncertainty in the market eased.
Despite economic turbulence and the government mini-budgets impacting the property market, homebuyer demand remained strong. According to HRMC, the number of house sales hit 114,200 in November, 12 percent higher compared to the same month in 2021, indicating optimism amongst homebuyers.
Data from OnTheMarket revealed that 74 percent of active buyers in the UK were confident that they would purchase a property within the next three months, with a recent Savills survey confirming that the pool of homebuyers is even more committed to purchasing property than they were when they were surveyed back in August 2022.
Following two years of rapid market growth and high transactional activity for the UK housing market, higher interest rates and the rising cost of living are expected to prompt a steadying of house price growth and transaction levels over the next twelve months.
With this in mind, what can we expect from the UK property market in 2023? Historically, private renters tend to pay a significantly higher percentage of their monthly income than both social renters and owner-occupiers.
The UK rental market also experienced huge price increases in 2022 as a result of a lack of rental properties paired with consistently high demand from tenants, with many landlords offsetting any increase in mortgage costs to tenants.
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According to the latest figures, the median average rent across the UK now sits at £971 per month; and further research revealed that the gap in renting costs and mortgage costs has widened considerably. According to Statistica, whilst homeowners with a mortgage paid approximately 21.7 percent of their income in 2022. In comparison, private renters were now paying the equivalent of 33.1 percent of their income to cover the cost of rent. So, as renting becomes more expensive and property market forecasts continue to anticipate property price growth, those with a long-term outlook stand to gain more by getting onto the property ladder sooner rather than later.
Source: sunnewsonline.com
