UK house price increases – What has happened in the past few years?


What are house prices now doing?

There has been a lot of news over the past year or so regarding the lack of supply of property on the market together with a substantial increase in house prices.

UK house prices rose at the fastest rate in 2021 than any calendar year since 2004 according to Halifax.

The mortgage lenders said buyers sort more space in lockdown and took advantage of low cost borrowing and stamp duty holiday. Prices increased by 9.8% in 2021 said to be the fastest calendar rise since 2004 where it was at 12.5%.

The average UK property price is now hit a record high of £276,091 in December. In overall costs that is a rise of £24,000 for a typical home over the year.

What is due to happen in 2022?

They believe that growth is expected to slow during this year due to higher mortgage rates and squeeze on household income. The UK market has defined expectation in the last year so the Halifax say.

“In 2021 we saw the average house price reach new record highs on either occasions, despite the UK being subject to a “lockdown” for much of the first six months of the year”.

“The lack of spending opportunities are forwarded to people while restrictions were in place help boost household cash reserve.”

This factor, along side the stamp duty holiday and the race for space as a result of home working, will encourage buyers to bring forward home purchases they may have planned for this year.

However, they added “looking ahead, the prospect that may rise further this year to tackle the rising inflation and increasing pressures on housing budgets suggest house price growth will start to slow”.

The office for national statistics was slightly different in their current thoughts. In October they stated that house prices increased by 10.2% over the year to October 2021, down from 12.3% in September 2021. They stated that the average house price was £268,000 in October 2021.

The latest house data published by the Government for October 2021 shows the average house price has increased by 10.2%. They believe that the impact of the Covid-19 pandemic on both the number and supply of household transactions, might see larger revisions due to be published in the house price index estimates than usual.

They state that there is increase volatility in the Octobers estimates. Particularly at a lower graphical levels where transactions volumes are smaller.

Land Registry.

The land registry has been increasing the level of optimisation in order to process these applications to enable the data to be updated quicker. As a result of this process, initial data numbers may be lower than the pre coronavirus pandemic transaction volume. However, in the immediate to long term this lead to higher volumes being processed.

The land registry is the best way to judge what a property market is doing.

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Land registry deal with all the transactions in respect of people purchasing property. They deal with the registration of the new titles with new purchasers details. However, the land registry is 2-3 and sometimes 6 months behind the market in general. These transactions at the land registry only take place when an exchange of contracts has been recorded. In addition the completion gone through. They are always therefore behind the current general market rather than being up to date.

Landlords feeling pressure from tax and stamp duty rules.

According to the latest private rental index published by the national office of statistics private rental costs grew by 1.87%.

However, rents have increased quite substantially over the past few months. Most landlords are not aware that the rents have increased. You should always review your rents in relation to your portfolio on a regular basis. If you use a letting agent ask their advance on what is happening in the local market.

There are further costs coming for landlords with potential rises in interest rates in the next 12 months. It is important that you keep your costs as best you can so why not contact us regarding your landlords building insurance or commercial insurance to give you an up to date quote. You can always click here and have an instant quote immediately. You will receive at least 3 quotes from our online calculator.

White paper coming soon – levelling up.

The Government has announced another white paper which has even more regulations due for landlords. They have recently pushed back the renters reform bill which had regulations for life time deposits as well as scrapping of the section 21 notice.

The new white paper goes even further. They are looking to bring in a national landlord register, property redress for all landlords, improving the condition of homes and again abolishing the section 21 notice. All of these are due to come within a white paper and there will be consultation from the whole of the industry. In real terms the Government are now moving away from landlords and being more pro tenant. They are also going to allow planning permissions to be much easier in future. It will mean if you wish to obtain planning permission you will be able to do this without red tape from the local authority.

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