January and February saw the highest growth in property prices in 20 years.
There’s no denying that the residential property market has proven to be unpredictable over the course of the pandemic. The Stamp Duty Holiday encouraged many to move ahead of planned in order to save up to £15,000 – ultimately bringing a number of planned sales forward into the period spanning July 2020 to September 2021. This, amongst other factors has led to a lack of supply in a market already seeing higher levels of demand.
Despite this, the average price for a home grew by nearly 1% to £255,556 in January, in the best start to the year since 2005. Transactions have been the highest since 2007 and have grown by 25% since pre-pandemic levels of 2019. A factor in this growth in activity is the low mortgage rates and the savings collected by many who have been unable to travel or spend on socialising due to restrictions.
The Telegraph reported at the end of February that house prices have jumped almost £8,000 in the last month, the fastest growth for 20 years – with the average price of a house costing £348,804 – 9.5 per cent higher than this time last year. This has resulted in an overall increase in the average house price of almost £40,000 in the two years since the pandemic began. To put that into perspective, in the two years preceding the pandemic house prices rose £9,000.
Across our branch network which spans the North East market, we have noticed homes selling exceptionally quickly, and often higher than asking price. It’s certainly a sellers market due to heightened demand and lack of supply. We believe that this demand will remain strong and while prices may continue to grow, it is anticipated that the year the housing market may even out.
We are also welcoming more buyers from outside of the region, and many movers are now ready to retreat to the countryside due to flexible working conditions, or for similar reasons require more space for a home office. It is likely that buying a home will become even more expensive and a challenge for many as wage growth stagnates and interest rates rise. Many analysts expect that policymakers will increase the Bank Rate this year, after it pushed up to 0.25pc at the end of last year.
Robert Gardner, of Nationwide, warned this growth could slow as affordability stretched to new extremes when he recently spoke to The Telegraph. “House price growth has outstripped earnings growth by a wide margin since the pandemic struck,” he continued “Similarly, a typical mortgage payment as a share of take-home pay is now above the long run average, despite mortgage rates remaining close to all-time lows.”
We have teamed up with national part-buy part-rent specialists to help support buyers find their dream home and to allow sellers to open up their home to a much wider pool of potential buyers. The scheme, which is exclusive in the North East to Bradley Hall, is set to launch in the spring.
To speak to a property expert about selling your home please visit www.bradleyhall.co.uk to find your nearest branch.
