Why have house prices risen this month?
There’s been lots of speculation about house prices at the moment, and how they could be affected by things like rising interest rates and cost of living increases.
According to Rightmove, this month, the average asking price of a home in Great Britain has actually increased again, hitting another new record at £371,158. This is a small increase on the previous month, and slightly smaller than the five-year average we usually see in October. This is what they have to report:
The main reason that house prices have risen this month is that there continues to be more people looking to move than there are homes for sale. This means that new sellers putting their homes on the market over the past month have not felt a need to lower their asking prices to attract interest from buyers.
Our property expert, Tim Bannister, says: “What’s going to happen to house prices is likely to be on the minds of many home-movers right now, especially following the market uncertainty after the government’s mini-budget. There has been no immediate effect on average prices, but we’re seeing yearly growth in asking prices continue to soften.”
What’s happened in 2022 so far?
So far in 2022, we’ve seen slightly less demand from home-buyers compared to the previous two exceptionally busy years. After the pandemic ‘race for space’ started to level out, we’d been moving towards a more ‘normal’ kind of housing market, which we last saw in 2019.
But there are still more people looking to move than there are homes for sale, which has continued to push prices up.
However, the rapid rise in average mortgage interest rates has caused some would-be home-movers to put their plans on hold. In the fortnight that followed the mini-budget, demand dropped by 15% compared to the same two weeks last year. But it’s still higher than it was in the same period in 2019.
“It’s understandable that some new movers who have the option to wait, may want a clearer view than they’re getting right now for a major purchase such as a home,” says Tim.
“With uncertainty over where mortgage interest rates will go, those who can still afford to proceed may decide that waiting too long could come at an even higher cost than taking action to move now, especially if the level of demand continues to outstrip the number of homes available to buy, which will support house prices,” he adds.
Will house prices keep rising?
It’s likely we’ll see a seasonal drop in average asking prices in November and December, which would be in line with what we usually see at this time of year. But there are more economic events to play out before we can make a prediction for 2023.
“It will take a bit of time for the market to settle in to a new, more ‘normal’ level of activity following an exceptionally busy two year period in the housing market, especially with new developments happening almost daily at the moment,” says Tim.
Modified article taken in part from an article from: Rightmove
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All property sales and the financial advice that surrounds them are as unique as the people engaging in the transaction. It is important to not decide without seeking professional advice. If you want to sell your home and are considering redecorating before marketing, speak to one of our Property Professionals to get the best advice for presenting your home for sale before making any investment. This article is for the purpose of information only and should not be seen as financial advice.