Housing market ‘remains remarkably robust’
17th January 2022 14:40
by Myron Jobson from interactive investor
interactive investor comments on the latest Rightmove House Price Index.
Commenting, Myron Jobson, Personal Finance Campaigner, interactive investor, says: “The latest Rightmove House Price Index adds to recent data which combined paints a picture of a housing market that remains remarkably robust months after the withdrawal of the stamp duty holiday - which effectively turbocharged the market out of its Covid malaise. The ongoing demand-supply mismatch for property has helped to drive up house prices, with first-time buyer asking prices reaching a record of £214,176 after a monthly jump of 1.4%.
“The property market for first-time buyers continues to be a difficult one, compounded by the rising cost of living which, for many, could push their goal of buying their first home further out of reach. While mortgage rates remain low by historical standards despite December’s interest rate rise, buyers have to save bigger deposits than they did pre-pandemic as UK house price growth has significantly outpaced the rise in average earnings in recent history.
“’When will house prices fall’ remains the burning question for many would-be homebuyers. Last year was a remarkable year for the housing market, underpinned by the unleashing of pent-up demand for property, economic recovery, ultra-low mortgage rates and a stamp duty incentive (until the end of September). These market conditions will be difficult to replicate in 2022 and the spectre of rising inflation and interest rates could exert a cooling influence on the housing market. Even so, the continued demand-supply mismatch in the property market could result in the tempering of house price growth rather than price falls in the near future.”
Key points:
- According to the latest Rightmove House Price Index, the average price of property coming to market rose by 0.3% in January from December, to £341,019.
- This is 7.6% higher than January 2021, and the highest annual rate of price growth recorded by Rightmove since May 2016.
- First-time buyer asking prices hit a record £214,176 after a monthly jump of 1.4%.
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