UK House Prices Rise Due To Lack Of Supply
It can seem as though everyone has an interest in the UK property market. It is only natural for people who are keen to buy or sell property to stay aware of how the market is performing, but house prices and demand are main talking points across the country. If you are a homeowner with no intention of selling your home, you still want to know how much your home may be worth or how the overall trend for UK house prices is moving. This is why there is so much interest when experts and specialists make predictions relating to UK house prices.
A rise in UK house prices took many by surprise
As 2017 was ending, there was a wide range of opinions about how property prices would fare in 2018. While every expert had their own take or prediction on the market, there was a consensus in how prices would behave this year. The outlook was that property prices would fall or would at least endure a slower rate of growth, which meant that many property owners were bracing themselves for a lower price or a challenging time. Of course, if you are looking to buy property, predictions of a lower price is good news, so not y was dismayed to see negative headlines in newspapers regarding the UK property market.
However, Nationwide caused a few people to do a double take when they announced that property prices rose in January 2018. Some of the headline figures provided by the mortgage provider included:
- The biggest rise in property prices in 10 months
- A rise of 0.6% in average UK property prices
- The UK average property price rising to £211,756
- The annual house prices rising by 3.2%, an increase on the 2.6% rise for December of 2017
The fact that Nationwide released a statement which said their Chief Economist was surprised at the rise in prices tells a story of its own. There was a genuine belief that the market would slow down this year so these figures for the opening month of 2018 was a shock for many people.
Whenever there is a shock in the market, it is vital that people understand why the outcome occurred. There are many varied factors influencing the UK property market and some factors will be more important than others. In the past couple of years, many sources have cited Brexit as the biggest factor in UK house prices, but as of yet, this hasn’t materialised. There has been uncertainty in the market caused by Brexit, but it is far from the biggest factor people must contend with.
A lack of supply is a major problem in UK housing market
Instead, and the reason for the rise in prices at the start of 2018, has been a lack of supply in the housing market. This is nothing new. A lack of affordable housing has been a hugely crucial factor in the UK property market and if you’re looking for the lead reason why prices have risen in the manner that they have in the past decade, a lack of housing is your answer.
In January, perhaps reacting to the predictions that house prices would fall, many property owners decided against placing their home on to the market. This reduced the available supply of homes, further pushing up property prices. In this regard, property owners who held their nerve benefitted from the actions of the property owners who decided against placing their home on the market.
It is likely that there will be a lot of movement and changes in the UK property market in 2018. If you want to be fully informed as to what will happen next, make sure you stay in touch with Peter Anthony.