Time is of the essence when it comes to buying a property at the moment, as house prices are soaring at an unprecedented rate, having increased by more than £27,000 since last May.
According to the latest Halifax House Price Index, properties in May 2021 were £261,709 on average, whereas they are now £289,099 – a staggering £27,390 more.
This is an increase of 10.5 per cent over the 12 months, with the rate having been in double digits since February this year.
Russell Galley, managing director of Halifax, noted: “Despite the very real cost of living pressures some people are experiencing, the imbalance between supply and demand for properties remains the primary reason driving the continued climb in house prices.”
Detached houses have particularly soared in value, rising by £50,000 over the last year, whereas flats have only increased by £10,000 during the same period.
Mr Galley did reassure prospective homebuyers, however, by saying: “The housing has begun to show signs of cooling.”
This is the result of inflationary pressures on household budgets and a decline in mortgage activity, demonstrating an affordability problem with buyers.
In addition to this, the Bank of England revealed the base rate has been raised from one per cent to 1.25 per cent. This is the fifth consecutive increase since December last year to combat the country’s financial problems following the pandemic.
This increase will have an impact on mortgage rates, causing variable and tracker loans to rise. This could make it even more challenging for homebuyers to afford a house, which could cause house prices to drop over the next few months.
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