Where are house prices rising fastest?

The property market was weak at the end of last year, with fewer homes coming to market, and prices even showing signs of falling in some areas.

But UK house prices bounced back in February. Annual house price growth rebounded to 6.9% more than erasing a small decline seen in January.

At Continuum we look at the reasons why, where the boom is at its highest – and at how we can help you with your property plans.

Why are prices on the up?

Average prices increased 8.5% in 2021, reaching a record high of £252,000, the Office for National Statistics has stated – although the Nationwide suggests an average price of £231,061.

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Certainly, despite the economic slowdown and worries about the future brought on by Covid, home buyers across the country have been key to get on or make their way up the housing ladder.  The stamp duty holiday giving a tax exemption on the first £500,000 of residential property purchases, and the record low interest rates that make big mortgages more affordable have all been important.

But being able to buy a bigger home for less may only be part of the story. The house price boom was also driven by increased demand. People trapped inside by months of lockdown may have reassessed what they wanted from their homes and decided that more space both inside and out was vital.

At the same time, the discovery that working from home could increase productivity and avoid the daily commute meant that some people were changing where they were looking to live. Going into the office once or twice a week has meant that living close to fast transport links is less vital than it used to be.

There is some suggestion that house prices may be going up overall – but those that are going up fastest are for larger homes, with plenty of space for a home office – and locations away from city centres. Many peoples’ housing needs have changed as a direct result of the pandemic, with many opting to move to less densely populated locations.

So where are the boom towns?

As usual, the actual figures on property prices are mixed – and different surveys produce very different results. It seems to be safe to say that increased appetite for space was reflected in growing demand for detached properties, which increased 10% in price in the year to December, compared with a rise of just 5% for flats and maisonettes.

But as always, the key factor is location. Prices rose fastest in the North West, where they grew by as much as 11.2%, compared with a relatively sluggish 3.5 % in London which saw the lowest growth. The North West, Yorkshire and the Humber, and Wales saw steady growth in property values in 2020.

The true story is as always that different parts of the country are seeing the market work in different ways. The East and West Midlands, which had lower than average prices in the past my be catching up, are seeing growth of more than 4%.

In the current uncertain market, getting the best possible mortgage deal is more important than ever. The simplest way to do that is to call us at Continuum – we can search the entire mortgage lending market for you.

What about the future?

Savills, which covers the entire UK is bullish about the future. A spokesperson has said it now expected prices to rise by an average of 4% across the country this year, and by 21.1% before the end of 2025. This would take the average cost of a home in the UK to £279,644.

Over the next five years they forecast the biggest increases are in the North West of England, where prices could go up by 28.8% to an average of £227,879, and in Yorkshire and Humberside, predicting a 28.2% rise, taking the average to £220,921.

Prices in London are predicted to grow by 12.6% across the five year period, taking the average to £547,868.

Call us

If you are considering your property plans for a home or an investment, call us to arrange an appointment with a mortgage expert from the Continuum team today.

Of course, at Continuum we are ready to help you find the mortgage you need whatever happens to the housing market and we have some important advantages compared with going direct to a lender. We can look at the offerings of all the mortgage lenders. Not only can we help you identify the hidden costs and see which really are the best deals for you, we can introduce you to deals that are only available to broker services like ours.

Call us to see how much we can save you on your next home.

The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable mortgage product, you should seek independent financial advice before embarking on any course of action.

Your home may be repossessed if you do not keep up repayments on your mortgage. 

UK house prices rise at fastest rate since 2014, official data show | Financial Times (ft.com)

e.surv: Average house prices up 8.6% in England and Wales | Mortgage Introducer


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