According to a recent article in Forbes, UK house prices have continued to rise, with last month’s year-on-year increase hitting 7.6%, bringing the average house price to £260,800. This rise in prices has been driven by factors such as increased demand from buyers, a shortage of properties on the market, and low-interest rates.
The article also highlights the regional disparities in the UK property market, with London and the South East continuing to be the most expensive areas to buy property. However, other regions, such as the North West and West Midlands, have seen significant increases in prices, driven by high demand from buyers seeking more affordable options.
The Forbes article also touches on the impact of the pandemic on the UK property market, with remote work and flexible living becoming increasingly important factors for buyers. The article notes that many buyers are now seeking properties with dedicated home offices or outdoor spaces suitable for working from home, and prioritizing homes with additional living space, such as a guest bedroom or separate annex.
Despite fluctuations in the economy, and government spending cuts affecting the housing market, demand from homebuyers remained strong. According to HRMC figures, there were a total of 114,200 house sales reported in November – 12% higher than what was seen during that same month last year – suggesting confidence amongst those looking for homes.
Despite the rising prices of properties, the issue of affordable housing remains a significant challenge in the UK. With many people struggling to get on the property ladder, the government has introduced various measures to increase the supply of affordable homes, including funding for housing associations and shared ownership schemes.
Sustainability is also becoming an increasingly important factor in the UK property market. Buyers are looking for properties that are energy-efficient and have low carbon footprints. Additionally, many people are now prioritizing properties that have outdoor space or are located near green spaces, as they place a greater emphasis on their health and wellbeing.
THE RENTAL MARKET
Traditionally, private renters allocate a much larger proportion of their salary to rent than both social tenants and homeowners.
In 2022, the UK rental market saw significant price increases due to a lack of available properties in addition to an ongoing high tenant demand. To protect their profit margins and offset any rise in mortgage costs, many landlords transferred those expenses onto tenants.
Shocking statistics reveal that the median average rent across the UK is now £971 per month, a figure which has increased in comparison to mortgage costs. In 2022, homeowners with mortgages were paying approximately 21.7% of their income whereas private renters are shelling out 33.1%, an indication of just how large this gap has widened over time.