Increase in average house prices in February
A new report by Zoopla revealed that there was an 8.1% increase in average house prices in February since the past year. While it may be slightly lower than what it was in January, i.e., 8.4%, it is still a cause for concern for many UK adults who are looking to purchase a home. In fact, another study by Market Financial Solutions indicated that 66% of potential homebuyers in the UK were afraid about their chances of buying a home in 2022 due to the increase in prices, inflation, and interest rates.
With that said, this article outlines more details from this Zoopla report so that you can inform yourself about the real estate market if you’re looking to buy property for yourself or as an investment.
Perspective on House Price Increase Over the Years
It’s important to understand how much the average house prices in the UK over the years to get some perspective on its trajectory. In a decade, the average house cost increased by £80,000, according to Zoopla. While that may be good news for those who invested in property about a decade ago, it has presented numerous challenges for those seeking affordable housing. What has made this even more challenging for homebuyers is that the demand for housing is high while the supply is significantly lower, unable to match the needs of UK residents.
Potential Reduction of Price Growth Rate
While minor, there has been a slight decrease in the price growth rate from January to February from the past year, going from 8.4% to 8.1%.
Zoopla has also suggested that the price growth rate may decrease due to the increase in supply. The price index report showed that there was a 5% increase in the number of new properties for sale in January from the average taken from the past five years. Despite the high demand, which was recorded at 70%, a gradual increase could help slow down the rate of house prices and potentially even lower the average price--that said, that could be wishful thinking.
According to Zoopla, there is also evidence that the price growth rate has been decreasing over the last few months. The price of houses had moved forwards only by 0.9% by when the report index was published. This percentage has been the lowest it has ever been since August 2020.
Last Few Words
Undeniably, the COVID-19 pandemic has also had a significant impact on the prices of homes and the overall liveability for many UK adults. With price increases in various areas, it’s no surprise that 66% of potential homebuyers in the UK are uncertain about their ability to afford to purchase a home this year. That said, even though there is an increase in average house prices in February, there’s a chance that the overall rate of growth may begin to decrease in the near future.