UK house prices rise at the fastest annual rate in 18 years. What's next?

Record-breaking house price growth means many sellers have made huge profits. Have you?

Do you know what your property is worth today? Get the latest on piping hot house prices…

Last year, house prices in the UK hit an all-time high and, according to Zoopla*, the average home increased in value by up to £16,000.

Last month, house prices in the UK rose at the fastest annual rate in 18 years**. Demand – especially for semi-detached and detached homes – continues to outstrip the number of properties on the market. Much like current temperatures, prices sizzled in June – rising year on year by 13%. That’s the highest since 2004.

Curious to know whether your house has increased in value? Find out all you need to know below…

Halfway into 2022, house prices have defied all expectations 

Despite recent base rate increases from the Bank of England, it appears the market is defying all the odds. In fact, according to Rightmove, the average UK property now costs an eye-watering £369,968. Your house – whether that be a terraced, semi-detached or flat has probably increased in value too. If you want to know just how much, you can find out in 60 seconds. 

What could your home sell for?

Where have prices increased the most across the UK?

Northern Ireland is steaming ahead – annual house price inflation here was up by 15.2%, equating to an average property price of £187,833. Wales is the location of choice for so many, and has seen a very strong rate of annual growth, up by 14.3%, with an average property cost of £219,281. Meanwhile the South West saw the highest annual house price growth of any region in England, at 14.2%, where a typical home now costs £308,128. Up in Scotland, the temperatures and house price inflation is slightly cooler, but still a very strong 9.9%. That means that as of June, the average cost of a Scottish home is now £201,549, breaking through £200,000 for the first time in history.

Where have house prices increased the least?

The exceptions to the price rule last year are London where we’re seeing lower rates of growth. The annual property growth is currently 7.1% but the average price of a property here is £547,031 so it really remains one of the most expensive places to purchase property in the UK.

How will these house price increases affect the housing market for the rest of this year?

Most homeowners have experienced a lift in equity, which could encourage some people who have been undecided about moving to finally take the plunge. The increase in house prices will possibly persuade a lot more sellers to come to market over the next few weeks. On the other side of the coin is the fact that increased prices can also make it more challenging for buyers, although this will be dependent on where they are located, and the type of property they are purchasing. The increased price of property could also make it difficult for sellers to find a property to move to, but that’s where a good agent can be valuable.

Are buyers likely to have more property choice later this year?

A huge factor in the lack of choice was the lack of sellers coming to market, as well as the speed at which the market was moving. According to Zoopla, the average time between listing a property and agreeing a sale subject to contract was 50 days in the years before the pandemic. In 2022, it’s consistently below 30 days. As the market starts to move at a more normal pace, there will certainly be more properties coming to market, which is great news for house hunters.

Do you know the value of your property?

What’s happening in the rental market?

The booming rental market (yes, it’s still booming!) hit record high rents last month. Average asking rents outside of London reached £1,126 per calendar month in July, rising 3.5% from last quarter and 11.8% higher than last year. London also saw new record asking rents of £2,257 per month, with annual growth now exceeding 15%. According to Rightmove this is the highest ever annual rate of any region.*** If you’ve been on the fence about getting into buy-to-let, now might be the time to take the plunge?

What about interest rates increasing?

It’s not an easy time for first-time buyers. They face record house prices and now interest rates have risen again. This means their monthly mortgage payments are over 20% higher than the start of this year****. Buyers could look to lock in longer mortgage terms as many lenders are now offering almost the same rate for either two-year and five-year fixed mortgages.

What’s the forecast for the rest of 2022?

Much like the weather, it’s difficult to predict the UK property market. What we can say is that we’re currently still seeing a continued demand from new buyers looking to purchase the limited housing stock available, and so we would encourage anyone thinking of selling to take advantage of this key window of opportunity, now.

The average UK property now costs £369,968. What's yours worth?

*Source: Zoopla House Price Index // November 2021
**Source: Halifax House Price Index // June 2022
***Source: Rightmove Rental Tracker // June 2022
****Rightmove House Price Index// June 2022