Monitoring the housing market is very important for many, particularly those doctors and dentists who are looking to purchase their first home or who are investing in buy-to-let properties. Our monthly Property Price Update gives you a summary of what the experts are saying.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
What’s happening in the UK Property Market?
In February, annual house price growth increased yet again from 11.2% in January to 12.6%, a monthly change of 1.7%. Not only is it the strongest growth pace since last June, but it’s the seventh consecutive monthly increase.
The average house price in February was £260,230, up from £255,556 in January.
Housing market activity has been strong in recent months thanks to robust demand coupled with limited supply of homes on the market. Mortgage approvals continue to run above pre-pandemic levels and the state of the market is dictating a trend upward for house prices.
With inflation hitting a 30 year high of 5.5% in January, and rising borrowing costs, the liveliness of the market is somewhat surprising, particularly as the increased pressure on household budgets usually goes hand in hand with weakening consumer confidence.
Future outlook
With the crisis in Ukraine, financial experts caution that inflation could further increase and push up global energy prices with it. As long as the labour market remains strong, the Bank of England base rate will rise, which will be reflected in increased interest rates, contributing to an overall slowdown.
Even without extra factors, housing affordability is coming into question. This can mainly be attributed to house price growth outpacing earnings ever since the start of the pandemic, with a typical home valued at 6.7 times average earnings, up from 5.8 in 2019.
The economic outlook is, as ever, uncertain. It’s possible the recent boom means activity just hasn’t caught up to the market yet and that it will slow over the next few quarters. And in fact, with inflation set to rise to 7-8% in the not-so-distant future, it’s incredibly likely.
Check back next month
There’s never been a more important time to keep an eye on the market and the changes from month to month, so be sure to check back monthly for all the updates on the UK property market.
Figures quoted from Nationwide House Price index February 2022.
Mortgages for Doctors and Dentists
Always remember to visit our site monthly for your regular update on the nation’s property prices.
If you’re planning to buy or sell property this year contact an advisor for personalised advice.
At Dental & Medical Financial Services, our experts are dedicated to helping our clients select the right mortgage deal for your needs. If you’re ready to take the first step toward home-buying, get in touch with us today.