The Housing Market - Are prices still on the rise?

Date Posted:
January 13, 2023

During 2021, housing prices rose faster than at any other point over the past fifteen years with an average increase of 10% in the space of 12 months, according to the latest figures from the Office for National Statistics. That means buying a house is far more expensive than it was even just 12 months ago, even though the last two years have been spent under a global pandemic.

Despite the Bank of England increasing base interest rates in December from 0.1% to 0.25%, mortgage rates are still relatively low thanks to lenders offering sub 1% mortgage deals in the recent years to entice new customers. Off the back of this the house market still seems to be thriving. This means that borrowing money is more affordable and is pushing up housing prices. However, with another rate rise looming and the effects of Omicron still to be felt, there is concern that the current economic climate might have an adverse effect on the housing market. Add in rising inflation and the cost of living and these factors are likely to directly contribute to lenders increasing their own rates and it will become harder to find a cheap mortgage deal and become more expensive to borrow money. Fewer loans will create a reduced demand and house price rises will slow down.

So, can we expect this to be the case in 2022?

Russell Galley, Managing Director of Halifax believes there may be some uncertainty over rising house prices in 2022 “Looking ahead, there is now greater uncertainty than has been the case for quite some time, with interest rates expected to rise to guard against further increases in inflation,”

“Economic confidence may be also be dented by the emergence of the new Omicron virus variant, though it remains far too early to speculate on any long-term impact, given insufficient data at this stage, not to mention the resilience the housing market has already shown in challenging circumstances.”

This uncertainty over how the house market is going to play out over 2022 has been broadly echoed elsewhere, but with first time buyers and a strong job market still pushing up sales, any decrease in housing prices are likely to be a slow decline rather than a significant drop.

Despite the expected flattening out of the housing market, you can currently still get a sub 1% mortgage deal, although admittedly only for those borrowers with huge deposits. But whilst mortgage deals are still low, even if house prices are not, we would advise that now is the time to get a good deal rather than waiting to see if house prices will come down. If you can afford to buy, we recommend you do so.

Given all the outside influences on the housing market, mortgages can often seem confusing, especially when trying to work out what will be the most cost effective deal for you and your circumstances. There are also specific lending factors to consider, such as the size of your deposit, the type of loan, your credit score and length you would like your mortgage for.

If you are interested in buying a house this year or are thinking of remortgaging, then it is worth speaking with a mortgage broker, such as Property Link Homes, who are qualified to not only answer any questions you have, but help you get the best deals out of the current housing market. It may look like a sellers’ market out there, but there are still good deals available and a mortgage broker can find you exclusive offers you may not get elsewhere.*

If you want to get the best deal without spending valuable time searching for and evaluating each lender, Property Link Homes can help. With access to hundreds of exclusive deals, we can help you find offers that are specifically tailored to your needs.  

Don’t waste time, get a better deal on your mortgage with us. Please contact us today.

*As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.

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