average cost of buying a home exceeds £ 270,000 for the first time as London’s growth lags

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The UK average house price has exceeded £ 270,000 for the first time since the records began, due to the pandemic’s campaign to buy bigger and more expensive houses.

New data from Halifax, released this morning, revealed house prices rose 8.1% in the year through October, bringing the average value to £ 270,027.

Despite the economic shock of the Covid-19 crisis, house prices have climbed for the past four consecutive months, the report also showed.

Even after the end of the government’s stamp duty holiday, which ended in September, demand shows no signs of slowing down, especially in the hot markets of Wales, Northern Ireland and the North. west of England with annual growth rates of 12.9%, 11.3% cent 10.4 per cent respectively.

“UK house prices soared again in October, as the average property value rose 0.9% in the month, an increase of over £ 2,500 in just one month. The annual inflation rate is now at 8.1 percent, its highest level since June, ”said Russell Galley, director of mortgages at Halifax.

“One of the main drivers of activity in the housing market over the past 18 months has been the race for space, with buyers looking for larger properties, often further away from urban centers,” he continues. . “Combined with temporary measures such as reducing stamp duties, this has helped push the average house price to an all-time high.”

House price growth in London is lower than in the rest of the UK

London is the weakest region in the UK as measured by growth in house prices, with annual inflation of just 0.8% in the 12 months to October, compared to an increase of just 0.1% in September – which was the smallest year-over-year increase since Covid-19 first struck in February 2020.

The average cost of a house in London increased by almost £ 20,000 during the pandemic and now stands at £ 514,907 – the highest in the country. The economy of stamp duty has therefore less affected the overall cost of buying a new house and moving in the capital than elsewhere.

However, Guy Gittins, managing director of Chestertons, says the slower price growth in London is due to healthier inventory levels than elsewhere in the country.

“Our buyer levels are up 60% at the moment and we are seeing a record level of transactions. It’s good weather for an active market, ”says Gittins. “There is just more churn in London right now, as a lot of different people at different levels of the ladder are moving around and releasing inventory.”

Rising Interest Rates: Now is the Time to Fix It?

First-time buyers, backed by mom and dad’s bank, and historically low mortgage rates have also propelled home buying activity despite the pandemic backdrop, the Halifax said.

As recently as yesterday, the Bank of England announced that interest rates will remain stable this month, although economists expect them to increase very soon in an effort to control inflation. this winter with rising fuel and food prices.

Experts believe there is a rush to get a fixed mortgage rate now ahead of an inevitable hike, which is also fueling home sales this fall.

“With the Bank of England to respond to inflation risks by raising rates as early as next month, and more such hikes are expected over the next 12 months, we expect demand to buy from housing cools as borrowing costs rise, ”Galley said.

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