UK House Pricing Growth – November 2021 displays higher edge
COVID-19 is a global key event that disrupted the normal functionality of countless economic sectors across the world, but it affected the UK property market differently. No one knew that despite negative connotations, it would shape the UK property market in a positive manner, during the course. If you have been closely following the UK real estate trends, you are probably aware that the house prices have augmented dramatically, in the last year.
The rise has been appended with a number of factors including:
- stamp duty holiday
- mbalance between supply and demand
- impact of Brexit
However, the question was that what does the future hold for the UK property market? Will the prices set to rise or we could see a dip in prices in the near future? Let’s see what the trend shows.
UK House Prices shows an upward trend in November…
UK house prices shows an upward trend, as prices rose more than expected in November 2021, as positive activity was witnessed. The property market is expected to become the busiest for 14 years, with positive activity despite the end of a tax relief for homebuyers.
Average house prices rose…
The average price of a house in UK increased 0.9 percent – while, the economists had expected a gain of 0.4 per cent and the pace outdid, even the most optimistic forecast of 0.5 per cent. The annual rate of growth climbed to 10 per cent. The stamp duty cut (imposed on house prices in the UK) was ended in October that was supposed to fuel a boom since it was introduced in July 2020.
However, several factors such as shortage of house supply, pandemic-driven demand for larger houses and even other economic factors are still present.
Mortgage rate impact…
Despite the prospect of an increase in UK interest rates in December, the borrowing costs have stayed low. A tough competition was witnessed among mortgage lenders that brought the rate on new mortgage lending down to 1.59 per cent in October – the lowest on record.
Real estate experts tag the rise of double-digit house price growth with low supply while the demand for the UK houses remain stronger throughout the year.
Another data from the Bank of England shows the number of mortgages approved for the UK houses fell to the lowest level in October – in the last 16 months. However, experts believe that slowing down was evident after the stamp duty holiday ended and the purchase pressure of larger homes due to COVID-led pandemic.
Nationwide Building Society states…
Nationwide Building Society nonetheless warned the UK residents to compromise on living standards for households, with inflation accelerating, interest rates expected to rise and tax rates increases set to hit in the coming months.
“While consumer confidence stabilised in November, sentiment remains well below the levels seen during the summer, partly as a result of a sharp increase in the cost of living. Moreover, inflation is set to rise further, probably towards 5 per cent in the coming quarters,” said Robert Gardner, Nationwide Building Society’s chief economist.
“The outlook remains uncertain, where a number of factors suggest the pace of activity may slow. “Even if economic conditions continue to improve, rising interest rates may exert a cooling influence on the market. Indeed, house price growth has been outpacing income growth by a significant margin and, as a result, housing affordability is already less favourable than was the case before the pandemic struck.”
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