Despite the ongoing rise in the cost of living, lumped with looming energy bills, the cost of property in the UK continues to rise.
At least that was the findings from property portal Rightmove’s House Price Index this week which showed monthly growth at 2.3 per cent – £7,800.
Average home nudging £350,000 mark
The sum was the largest monthly increase since 2001, which is when the company began recording data. On an annual basis that works out at a 9.5 per cent increase over the past two decades.
It brings the cost of the average home in the UK to £348,800, according to the survey’s figures, which are based on asking prices on property from 13,000 estate agencies.
London prices benefit from return to city working
With Boris Johnson announcing the end of COVID restrictions this week, a look back at property values over the past two years since the UK first locked down in March 2020, shows an average increase for property of £40,000.
Interestingly, the end of restrictions has also been reflected in London’s property prices. They jumped by six per cent between January and February, as commuters and foreign travellers began returning to the city. It was also a 7.3 per cent increase from February 2021.
Analysts blame the shortage of available stock for pushing prices up UK-wide. That is closely followed by low mortgage interest rates (the Bank of England raised then from 0.1 to 0.25 per cent at the end of last year).
In fact, interest on the typical two-year fixed mortgage rate is expected to double in June in comparison with September 2021. That’s according to Samuel Tombs of Pantheon macroeconomics. This, the economist insisted, will certainly slow down any rising property growth.
Renters paying more for city living
But it’s not just buyers who are paying more – and particularly in London – for a new roof over their heads. According to recent findings by rival property portal Zoopla, city centre rents are up by £62 per month compared to pre-pandemic amounts.
Zoopla’s statistics also showed that demand for rental accommodation in cities was up by as much as 76% last month – that’s compared to the last four months of January. And it wasn’t just London that rents had increased in – Manchester, Liverpool, Newcastle and Edinburgh all recorded a similar increase.
Grainne Gilmore, head of research at Zoopla, said: “The flooding of rental demand back into city centres thanks to office workers, students and international demand returning to cities means the post-pandemic recalibration of the rental market is well underway.”
Increase in companies looking to lease office space
Meanwhile, office space is also coming under the radar, with many companies keen to tempt their staff back to city centre working.
An earlier report by Rightmove, looking at commercial property, reported an increase in business owners looking to lease office space. And that’s not just compared to pandemic figures (a 54 per cent jump on January 2021), but even pre-pandemic, with interest in leasing today 15 per cent higher even than in 2019.