The latest figures from HM Land Registry show that the average UK property value was 8% higher in the year to June to £255,535 – but a 3.7% monthly drop.
Is this a sign that house prices are stabilising or starting to fall?
This is the first sign of a house price decline in over 18 months, but it’s important to note that property values have been rising at a record pace for a sustained period of time, so this stabilisation is inevitable. With mortgage affordability remaining at record lows, the housing market will continue its buoyancy well into autumn and beyond.
This slight readjustment in the market, which has been fuelled by a partial slowdown in activity in some parts of the country, is not unexpected but with an uneven balance between demand and supply in many regions, demand will continue for the rest of the year especially as desperate buyers who want to get in the market as soon as possible will be willing to pay more to outbid other buyers.
Since the property market opened at the end of last year in June, no one could have predicted the rise in house prices that we have seen across nearly every region in the UK – with some of the highest price rises and selling times in Scottish regions.
The pandemic resulted a re-evaluation of buyers’ priorities towards more space to accommodate the new normal of home working. There was a move away from city centres in favour of rural areas with access to a garden or local parks. This, combined with pent-up demand during lockdown, a stamp duty holiday, and the re-introduction of high LTV mortgages and low borrowing rates, resulted in one of the busiest periods we have seen in the housing market.
We have seen a strong annual rate of growth with no real let-up in demand. Stock in scarce and this has pushed up property prices.
The autumn is traditionally one of the busiest times of the year and we could also see a return of overseas buyers as the travel industry opens up once more.
If you are considering purchasing an investment property in Glasgow, there are still some great options especially with rental demand high and apartments still relatively affordable compared to three and four bedroom family homes.
If you want to find out about rental values and locations – talk to us at Newton Letting.