The UK housing market was one of the economic bright spots during the Covid-19 pandemic, and it has carried on delivering positive growth in 2022. The latest reports demonstrate that property price growth is strong thanks to impressive fundamentals.
Zoopla’s latest house price index report shows us an 8.1% increase in values was recorded over the 12 months to February, putting the new average UK house price at more than £245,000. This is a historic level which should offer investors and homebuyers alike a good degree of confidence as they look to purchase new properties.
When we look at individual markets more closely, we can see that the best performing cities like Manchester (9.2%) are experiencing even greater growth. Likewise, the strongest regions like the North West (9.4%) are following suit.
Competing figures from Nationwide published at the end of March show that house price growth may have been even stronger than that cited by Zoopla.
The mortgage lender said that annual growth in house prices hit 14.3% in February. This means that the cost of a typical home in the UK property marketplace reached a new record high of £265,312, rising £33,000 in the past year and reaching a 17-year high.
"A combination of robust demand and limited stock of homes on the market has kept upward pressure on prices," said Robert Gardner, Nationwide's chief economist.
The UK labour market is strong - job vacancies hit a record high in October last year - and unemployment has continued to fall, which may have helped the housing market, he said.
This growing demand is the main factor in house price growth, and it has increased by 65% compared to the five-year average according to the aforementioned Zoopla report. This is in spite of the supply of new homes to the market rising slowly, up by 5% over the same time period, as sellers look to take advantage of a friendly market.
Overall, the number of sales agreed in Q1 2022 was 30% higher than pre-pandemic levels, even though the number of homes listed was 43% lower – a perfect example of how the lack of supply available is leading to more sales at higher prices. As a result, the market continues to be fast moving, with properties taking an average of just 29 days to sell.
Gráinne Gilmore, head of research at Zoopla, said: “Buyer demand remains elevated as the trends that emerged during the pandemic - a reassessment among households about where and how they are living - continue to drive the market.
“High buyer demand and rising supply signal activity levels will remain elevated in the short term.”
For first-time buyers and other people moving to a new home, this means that time is of the essence when purchasing your new property, and those who move quickly will be rewarded.
Similarly, investors looking for the perfect property should move to secure it rapidly to avoid missing out. With rents rising in key markets like Manchester and Preston, and landlords buying properties at the fastest rate in more than five years, this is an extremely healthy property market with high demand and the potential for significant returns.
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