The figures are certainly stark, with one UK house price index recently cited by the Express indicating that property prices went up by 0.8% during January, and saw a 1.7% rise in February.
Meanwhile, according to data from Zoopla, between October and January alone, there was an almost 1% increase in the average UK house price – the equivalent of around £2,000.
“A lively start to the year”
As counterintuitive as the recent stellar increases in house prices may seem to some, in the words of Zoopla head of research Gráinne Gilmore, “the fundamentals underpinning this growth have been in place for some time, as buyer demand continues to outstrip the supply of homes being listed for sale.”
She suggested that with strong buyer demand having already been seen throughout late 2020 and 2021, the figures for this year’s first quarter reflected prospective purchasers’ continuing “reassessment of home” in light of the COVID-19 pandemic. In other words, those looking to buy a property have been re-evaluating the space in which they presently live, as well as the location.
“Add to this the changing landscape around COVID,” Gilmore continued, “with city centres once again opening up, reintroducing pent-up demand, and the stage was set for a lively start to the year. In fact, the first two months of the year were the busiest New Year period in at least five years for many across the market.”
Expectations of “brakes” being placed on price growth
In her analysis of the recent house price situation across the UK, Gilmore pointed out that after the lifting of lockdown, many would-be buyers in office jobs had been eyeing up the opportunity to move further afield. That, in turn, has resulted in considerable competition for homes in markets offering more space at affordable prices, thereby having the effect of pushing up those prices.
She also noted that the data relating to supply levels indicated that “the market is now at a turning point and that the supply squeeze is starting to ease. New listings are starting to run ahead of the five-year average level, suggesting that more homeowners are putting their home on the market.”
Gilmore stated that such increases in supply would help bring about “more ‘normal’ market conditions, and an easing of the upwards pressure on pricing.”
This, she said, together with economic headwinds such as the cost-of-living crisis, would “put the brakes on price growth during the course of 2022, although we still expect prices to rise, albeit at a more modest pace of between 2% and 4%.”
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