The news has dropped recently from the UK’s largest mortgage lender, that house prices are still rising. This brings the average property price in the UK to £270,027 according to the Halifax. The Nationwide however stated earlier in the week that average property prices was now £250,311.
Whichever figure you look at, they both represent a huge rise in property values over the last year. October was the 4th month in a row that property values have grown.
Whilst some claim that the Stamp Duty Holiday has had an impact on the property market, the fact that London’s property prices were the slowest growers, indicates that the desire to move out of the city is a key factor too. This is backed up by the fact that Wales has seen the highest level of house price inflation.
What’s the Outlook? Will House Prices Continue to Rise?
The number of properties being put up for sale is dwindling. We’ve seen this across estate agents in South Yorkshire. Online estate agent, Purplebricks have recently cut its earnings forecast because of the drop in properties being listed on its platform, resulting in a significant drop in their share price.
The lower number of properties on the market will result in demand still being high. That coupled with the news that the Bank of England are keeping the interest rate at 0.1% for the moment also means that lending is as cheap as it has ever been.
Interest Rate Rises
There is the mid-term projection that the Bank of England’s interest rate will rise though. Some have projected that this could rise to 1% within the next 12 months.
If that happens, it is sure to have some level of impact on the property market. Those on variable rate mortgages will feel the hit on their monthly payments and buying demand is likely to be supressed as borrowing costs increase.