House prices: Expert discusses 'interesting' pricing differences
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High buyer demand is likely to result in the busiest housing market in almost 15 years, boosting the average value of a home to £240,000. Zoopla’s latest house price index said the property market has been redefined by the pandemic with many reevaluating their needs and what their homes can offer them. By the end of 2021, one in 16 homes will have changed owners.
Elevated demand has boosted annual house price growth to 6.9 percent – up from 3.5 percent in October 2020.
However, despite house price growth being at a seven-year high, this is a slight reduction compared to the above seven percent growth recorded in August and September.
Quarterly figures also suggest a slowdown in the overall pace of growth.
There has been 16 months of booming house prices with the average value of a UK home now estimated to be £240,000.
This is an increase of £40,000 when compared to five years ago.
Over the past 12 months alone, average UK prices have risen by £15,500, with the South East and South West recording growth of more than £22,000.
But increased demand means there are less homes for sale with the supply of homes being listed for sale running at between five and 10 percent below the 2017-2019 average.
Overall stock of homes for sale is down by more than 40 percent on the five year average but this is expected to recover next year.
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Grainne Gilmore, Head of Research at Zoopla, said supply levels will increase at the beginning of next year after Christmas.
“New supply will start to rise at the turn of the year as households use the holiday period to make a decision around making a move.
“In typical years, the highly seasonal supply of homes being listed for sale slows in the run up to Christmas, but rises sharply in the new year.
“On average, the supply of listings at the end of January runs some 50 percent higher than the start of December.”
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Regionally, Wales continues its stint in the number one spot for the highest rate of house price growth.
Price growth is up +10 percent in Wales and is closely followed by the North West of England where house price growth has hit nine percent.
London has been the most affected by the pandemic and has seen the slowest growth of 2.3 percent.
Some experts have suggested that the pandemic has led to a rebalancing of the north-south house price divide with more people moving to rural areas to get more bang for their buck.
As working from home continues for some Britons and the coronavirus pandemic rages on, this could remain the case going into 2022.
Other cities in the north such as Liverpool, Manchester and Sheffield also continue to show high rates of growth at 10.6 percent, 8.7 percent and 7.9 percent respectively.
Grainne said buyer demand will continue to be strong in 2022 as the market starts to return to pre-pandemic levels.
She said: “Buyer demand will remain strong moving into next year, but as the market starts to normalise in 2022, there may be an increase in the proportion of activity among movers, who are active in the market as sellers as well as buyers.
“This should ease the constraint in supply to some extent.
“Other factors that will affect prices next year include the looming economic headwinds in the shape of rising inflation – which will push household costs higher.
“Even with some interest-rate rises, mortgage rates are likely to remain relatively low compared to long-run averages, and there is more room for price growth across some of the most affordable housing markets.”
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