The last few years have seen a sharp hike in house prices across the country, but can this rise be sustained? While recent data from the Land Registry shows house prices were up by 12% since April last year, some believe we’re heading towards a slowdown.
So, what’s going on? While the market spiked in 2021 thanks to the well-publicised stamp duty holiday – fuelling sales as buyers rushed to save significant sums of money – it calmed over the winter of 2021 before slowly rising again across the UK.*
However, in May this year, the number of sales returned to levels seen just before the onset of the pandemic. But what has driven this reversal?
The cost of living crisis appears to be playing its part by straining household budgets. Combine this with rising house prices and mortgage interest rates, and you have a recipe for dampening buyers’ spending power.
This doesn’t necessarily mean prices will fall dramatically. Big names across the industry – such as Propertymark and Rightmove – are still reporting a mismatch between demand and supply, which is keeping prices buoyant for now. All in all, experts predict that prices may only increase by between 1–5% over the next year or two.**
What does this mean if you’re planning to sell? The good news for homeowners is that no one expects prices to plunge over the medium to long-term. But if you’re hoping to maximise your sale price, striking while the iron’s hot may pay off.
Our team is ready to provide tailored advice that reflects your unique situation.
*Based on data provided by HMRC (June 2022).
**Predictions provided by Rightmove, Zoopla
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