Despite the latest figures from HM Revenue and Customs (HMRC) showing that house sales in January fell by 10.6% compared to the same time last year, both average house prices and asking prices continue to hit new heights. According to the Office for National Statistics (ONS), the average price of a UK home increased by 10.8% in December 2021 year on year to reach a record £275,000, while Rightmove reported in January that asking prices across the country have reached a new average high of £348,804.
Even after the temporary stamp duty holiday ended at the start of October, UK housing market demand remains strong and prices have continued to increase. A lack of available properties is a key reason for house prices rising to record levels, with recent research by Savills finding that 90% of prospective buyers believe lack of supply is hindering their ability to find a suitable home. Furthermore, many potential sellers are reluctant to put their properties on the market currently due to concern about their own ability to find a new home.
Low unemployment (even after the end of the furlough scheme) and low borrowing costs are two other factors driving the UK housing market, although with inflation hitting a 30-year high of 5.5% in January, household finances are likely to deteriorate in the coming months. With real wages remaining flat or declining, applicants are likely to have less money to spend following a mortgage affordability assessment, and this combined with a general rise in the cost of living should at least take some of the heat out of the market. However, while demand continues to outstrip supply, the market’s upward trajectory may easily continue, albeit at a slightly slower pace than in recent months.
Bartletts represents property buyers and sellers in Liverpool and across Merseyside. Louise Nelson is a solicitor with 39 years experience of helping people buy and sell property in the area. Louise heads a friendly team of experienced conveyancers. Our firm is Law Society Accredited for Conveyancing Quality, and offers free no obligation quotations, competitive fixed fees and no hidden costs:
