Average House Prices Reach Sixth Consecutive High
The continuing climb of the housing market reached yet another peak as the average prices of properties heading onto the market reached their sixth all-time high in a row, but with that comes signs that the market is beginning to cool.
According to Rightmove’s House Price Index, the average price of a house for sale was £369,968, up over £1,300 from last month.
For Hackney estate agents, the story remained similar to the rest of the country, with the average price for property having increased by 6 per cent compared to 2021.
However, whilst records are still being broken and prices are still rising, the reasons why this is the case have changed significantly compared to previous months.
Whilst housing supply continues to be far lower than demand, there are 13 per cent more sellers than in 2021 and buyer demand is down 7 per cent.
This latter statistic can be attributed to rising interest rates caused by five bank rate increases in a row by the Bank of England which means that monthly mortgage payments for first-time buyers are 20 per cent higher than they were in January.
This, combined with the major increases to the energy price cap and other significant price increases that have contributed to a cost-of-living crisis suggests that a market that has travelled at a frenetic pace since mid-2020 may be starting to slow down.
One interesting element noted in the House Price Index was that the gap in interest rates between short and long-term mortgages has closed to the point that a two-year and a five-year fixed deal have the same annual rate as wary buyers lock themselves into a favourable cost per month.
This may provide some financial certainty during a time when prices seem to only be increasing, and this may ensure that demand continues to be strong for much of the rest of 2022.