21 July 2022
According to Rightmove’s Housing Price Index, the average price of property has seen a sixth consecutive record this month, rising by 0.4% (£1,354) to £369,968.
The Yorkshire & Humber region specifically has shown a month-on-month price increase of 1.0% and a yearly increase of 12.1%, with data showing an average time to sell period of 32 days.
Activity and, more importantly, demand remain strong in the market with buyer enquiries continuing to exceed historically normal levels and numbers are now 26% higher than at the same time in 2019, although interestingly still down 7% on the fast-paced and frenetic June 2021 market, which was no doubt fuelled by the removal of stamp duty tax and pent-up demand as the pandemic slowed down.
There are, however, signs that the seriously depleted stock situation may be improving. The number of sellers is up by 13% when compared with July last year, but this figure pales in comparison when compared to the number of available homes in 2019, by 40% in fact. This shortfall should serve to maintain the higher prices seen across the UK for the coming months and into 2023. The gap is so wide, Rightmove has revised its 2022 yearly forecast, with 7% annual growth now predicted by the end of 2022, up from the original 5% predicted.
The Bank of England’s decisions to increase the base rate of interest has seen lenders increase their interest rates across the board and, when combined with record prices, this means that the average first-time buyer monthly mortgage payment for someone taking out a two-year fix is now 20% (+£163) higher than at the start of 2022, working out to £976 per month.
Rightmove predict that demand is likely to return to more normal levels in the second half of the year due to the rising cost of living and affordability concerns, however the prospect of further interest rate rises may drive some to act now to lock in a longer fixed-term mortgage rate. This is even more likely because the gap between interest rates for shorter and longer term mortgages has been closing in recent years, and they are now virtually the same. For example, the average interest rate for a 75% loan-to-value mortgage is now 2.9% for either a two-year or five-year fixed deal. Historically, lenders offered a lower rate on a two-year fix, with a difference of as much as 1% between the two deals over the past five years.
With regards to the rental market, private rents in the UK have hit another record high, according to new data released by Rightmove in its quarterly rental price tracker.
Outside of London, the average rental property is now listed for £1,126 a month. That's 12% higher than the same time last year, and 19% higher than before the pandemic. Inside London, the average rental property is listed for £2,257, which is up 15.8% on this time last year.
This increase means that national rents outside of London are rising at the highest annual rate Rightmove has ever recorded in 16 years of reporting. Rents have now risen by 19% - or an average of £177 - since the pandemic started just over two years ago. By contrast, it took eight years to reach the same level of growth pre-pandemic, illustrating the rapid rise in asking rents since the start of the Covid-19 outbreak. This quarter’s 3.5% jump is the second highest quarterly rise in 10 years.
In Yorkshire, the average rental price is now £875pcm, a 3.1% quarterly rise and a 12.3% annual price increase, with the average yield calculated to be 6.7%
For a more detailed conversation about the property market or your requirements, please feel free to visit any of our branches across Yorkshire and find out how we can help you.