Over the past year, the previously unstable housing market has seen a surprising uptick, which is quite different from the decline that started after the housing boom ended in 2007. According to recent data from Rightmove, the average UK home price has now surpassed £250,000 for the first time.
In June, the average asking price for properties was £252,798, reflecting an increase of nearly £3,000 from the prior month, or a 1.2% rise. This marks a 2.7% increase compared to last year, indicating that the housing market has regained stability in 2013 after several years of fluctuations. However, prices vary significantly across different regions, with higher prices seen in London and the South East.
House prices in southern parts of the UK are generally much higher than the national average. In London, the average house price is £515,243, while in the South East, the average asking price is £329,968. Although house prices in the South East grew by 1.4% last month, not all areas are seeing similar growth. For instance, in Yorkshire and Humberside, the average house price fell by 0.5% in June, bringing it to £157,183. The North saw a slight drop of 0.3%, whereas the North West, including regions like Lancashire, Cheshire, Greater Manchester, and Merseyside, experienced a robust 1.7% increase.
Although rising house prices might seem beneficial for sellers, it’s not necessarily good news for everyone. Many potential first-time buyers find these high prices to be a barrier, which can reduce demand. This means that even owners of high-value properties might struggle to sell their homes.
For many potential homeowners, mortgage affordability is a crucial concern. While some mortgage options appear attractive due to low interest rates, securing a long-term financial commitment can be difficult. However, a spokesperson from the Yorkshire Building Society assured that obtaining a solid fixed-rate mortgage is still feasible. They mentioned that there is growing interest in longer-term fixed-rate mortgages, leading the society to introduce a 10-year fixed-rate mortgage to offer borrowers long-term financial stability.
Saving for a deposit can be challenging, but fixed-rate mortgages provide potential homeowners the benefit of predictable monthly payments. This could be a viable option for those who can afford a deposit but prefer not to deal with fluctuating interest rates. However, the initial challenge remains finding an affordable property, which can be tricky given the current market conditions.