Ups and Downs: Property Prices in an era of Pandemics and Politics
The 2020s have certainly been a rocky ride thus far and we are still only in the very infancy of the decade. For the UK, both Brexit and the Covid 19 global pandemic marked a sledgehammer blow to the economy and this has been followed in quick succession by the Cost of Living crisis, impacting both households and businesses alike.
For the housing market, however, the past two years have seen a significant increase in growth. Propelled by low interest rates and an increase in demand for more spacious properties with greater numbers of the population working from home, a sudden surge emerged in late 2020 as a market that was put on pause during the first lockdown opened up again and the built-up savings of a furloughed workforce came into force. Indeed, over the course of 2020, UK average house prices rose by 8.5%, to stand at a record high of £252,000, the highest annual growth rate since October 2014.
Forecasting the Future: What lies ahead for the UK property market?
Fast forward to today and whilst it may appear that the upward trajectory has continued, it has, in fact, been slowly losing traction. Although house prices were up by 6.5% in December of 2022, this is a drop from the 8.5% annual increase recorded at the end of December 2021. The stall in the market was not surprising, considering the tumultuous response across all economic sectors to the mini-budget set out by Kwazi Kwarteng in September. This, coupled with inflation rates reaching a high of 11.1% in October 2022 has impacted the wallets of potential buyers and has resulted in consumer caution that will undoubtedly send wider ripples across the housing market.
A new year, a new start and January 2023 has seen a sluggish start to the housing market as interest rates increase and consequently raise the cost of borrowing. According to the BBC The Bank of England has attempted to slow the rate of price rises by raising interest rates nine times since December 2021.
However, despite higher interest rates, mortgage rates have dropped from their 6.65% peak and a fall in both house prices and in average mortgage rates has the potential to fire up a buyers’ market. This suggests that 2023 may be an auspicious time for those hoping to snap up a bargain. Buyers and sellers looking to capitalise on the peaks and troughs of a rapidly moving market must ensure that the exchange from buyer to seller is carried out quickly and efficiently, an important element to factor in when obtaining conveyancing quotes. Specialists such as https://www.samconveyancing.co.uk/conveyancing-quote can offer further advice on the process of buying and selling property.
Whatever lies ahead for the UK property market, home is where the heart is and our innate desire to have a place to call our own will always be a driving force behind the UK economy.