Housing Market Update

Housing Market update! UK house prices reach record high in March as supply remains short. UK house prices increased by more than £43,000 since the pandemic started, reaching a record high in March. The average price of a property in the UK rose to a record high of £282,753.

Why do property prices keep raising?

• Relatively Low-Interest rates – Low interest rates have definitely helped increase house prices. Low-interest rates make buying a house more attractive than renting
• Constraints on House Building/supply – The government estimate we need to build 250,000 new houses a year, just to keep pace. However, despite many politicians talking about the necessity of building homes, in practice, we have a reluctance/inability to build houses. House building is at its lowest level since the second world war
• Demand is growing – A very simple economic truth: if demand increases faster than supply then prices will rise.
• Renting is expensive – The cost of renting has also risen faster than incomes. If you are paying £800 a month, it makes sense to try and get a mortgage where you will be paying £900 a month
• The Covid Effect – Whilst those on furlough may struggle with rent, Covid has ironically made buying a house even more attractive. There is likely to be a long-term shift towards buying a house. Therefore, a good living space becomes even more desirable. This is shown in the contrast between growth of prices in city centres and in the suburbs.

What else do you think have caused prices to rise?