Housing prices are rising at a faster rate than they have in the preceding 17 years
According to Nationwide chief economist Robert Gardner, housing values remain “close to a record high” in relation to normal incomes, which “makes it even difficult” for first-time buyers to find their dream home. House prices in the United Kingdom grew 13.4% year over year, according to Nationwide.
In a BBC interview, he discussed how the outbreak has “stimulated” the housing market, and how many people have “reassessed what they want from the house” with respect to its size or location as a result of coronavirus lockdowns.
House prices grew across the UK in the second half of 2021, with Northern Ireland and Wales experiencing the largest 12-month increases of 14 percent and 13.1 percent, respectively.
Scotland had the slowest rate of price inflation, with real estate prices rising at a rate of 7.1 percent, while London remained England’s slowest generating location, with 7.3 percent price inflation.
According to the building society, the typical property increased to £245,432 from £216,403 in June 2020.
Despite the surge in house values to “new all-time highs,” Mr. Gardner said that thanks to low mortgage rates, the typical mortgage payment was not high by historical standards when compared to take-home income.
It is, after all, a comprehensive viewpoint. The United Kingdom’s property market is separated into various submarkets. If you ask someone who is currently trying to sell a flat, they may believe they are in another universe.
The fundamental question is whether or not this upward trend will be followed by a downward trend.
If the economy fails to recover and jobs are lost, some people may be forced to sell and fewer will want to buy. If that is sustained and prices fall, negative equity looms for new buyers who are borrowing heavily now to buy somewhere bigger in which to live and work.
The market in recent months has continued to be stimulated by stamp duty holidays in England, Wales and Northern Ireland.
These tax breaks are being phased out this week, with full restoration to pre-pandemic levels expected by October.
Fine and Country Estate Agents’ managing director, Nicky Stevenson said that this kind of annual house price growth was not expected, especially now that the stamp duty vacation is coming to an end. The stamp tax plan’s expiration at the end of September may have no impact because other variables such as the race for space, limited supply, accidental saves, and low-interest rates are significantly more important. On the other hand, some researchers believe that the relationship between home demand and job creation is crucial to the future of property values.
Source: BBC News