Over the past year, the previously unstable housing market has seen an unexpected increase, a stark contrast from the end of the housing boom in 2007. Recent data from the property website, Rightmove, suggests we have reached a new milestone as the average UK home price has exceeded £250,000 for the first time.
Rightmove reports the average property asking price in June was £252,798, an increase of almost £3,000 from the previous month (1.2% increase). Compared to the previous year, there was a 2.7% hike, hinting that the housing market has regained stability in 2013 after periodic upheavals. However, there were significant regional variances, with properties in London and the South East attracting higher prices.
In the south of the UK, house prices are typically much steeper than the national average. In London, Rightmove reports the average house will set you back £515,243 while the asking price in the South East averaged £329,968. House prices in the South East grew by 1.4% in the previous month; however, not all parts of the country are experiencing such growth. For example, in Yorkshire and Humberside, the average house price dropped by 0.5% in June to a reasonable £157,183. A slight decrease of 0.3% was reported in the North, while the North West comprising Lancashire, Cheshire, Greater Manchester, and Merseyside witnessed a remarkable 1.7% increase.
Increased house prices may sound like a boon for sellers, but it’s not always the case. Many potential first-time buyers find the high prices prohibitive, leading to a dampened demand. As such, homeowners with high-value properties may find it difficult to sell.
Affordability of mortgages is a significant consideration for many aspiring homeowners. While low interest rates can make some mortgage options appear enticing, securing a long-term financial agreement can be challenging. But as a spokesperson from the Yorkshire Building Society pointed out, obtaining a good fixed-rate mortgage is still possible. They noted that borrowers are showing interest in longer-term fixed-rate mortgages, prompting the society to launch a 10-year fixed-rate mortgage to offer “borrowers long-term peace of mind.”
While saving for a deposit might seem an uphill task, fixed-rate mortgages offer potential homeowners the ability to keep monthly interest rates steady. It may be the solution for those managing to pay a deposit but reluctant to be subjected to fluctuating monthly interest rates. However, the first step is finding an affordable property, which, given the current housing market trends, could prove challenging.
