Despite decreasing demand, house prices continue to climb in the UK. This can make it difficult to get on the ladder if you’re looking to purchase your first home. Plus, it can make it harder to sell your current property and upgrade to a more luxurious home. Below, we explore this price hike, the drop in demand and what the future may hold for the property market in the UK.
The house price hike
One of the key features of the pandemic was that property prices boomed. Experts believe this was because there was greater demand for luxury living spaces, as people realised they’d be spending more time at home – be it for work or leisure. And despite a recent drop in demand for properties, house prices are still rising. This July, 63 per cent of surveyors reported an increase in house prices rather than a decline. And while this increase has slowed since the pandemic, projections still suggest that house prices will be more expensive in a year. Whether you’re buying or selling, this hike can alter your strategy significantly.
Recent drop in demand
This price hike has occurred during a climate where the demand for houses is dropping. Indeed, the Royal Institution of Chartered Surveyors has found that 25 per cent of property professionals reported three months of consistent decline in demand after July this year. This has been put down to the current cost-of-living crisis and high interest rates putting off buyers. Families are currently focusing on sticking to a budget and living carefully, rather than plotting their next move. On top of this, many families have been able to take their first holiday in two years, further reducing supply.
What the future holds
It’s natural to be fearful about the housing market given the rising prices and drop in demand. However, many experts believe that this won’t lead to a housing collapse – instead, the housing boom might not yet be over. This is despite the fears of many people that we will see a repeat of 2008 when a recession provoked a housing collapse. The optimism, for many, comes from the fact that house prices aren’t falling right now. Although the rate of increase has slowed, it augurs well for the market if houses are still growing in value.
If you’re thinking of upgrading to a new home in this market, it’s important that you get what you’re being promised. And by hiring trusted conveyancing solicitors, you can have peace of mind that you’re getting value for money. It’s a stressful time to buy a home, but the rewards can be truly worthwhile.
