UK House Prices: What you need to know (in 2022) | TheAdvisory (2022)

Keep reading to discover…
  • The truth about UK house prices
  • The pros & cons of all the major house price indices
  • How and where to get accurate information
  • And lots more…

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UK House Prices: What you need to know (in 2022) | TheAdvisory (1)

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UK House Prices: What you need to know (in 2022) | TheAdvisory (3)

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Table of Contents
  1. House prices + the media = Big problems

  2. What is the current UK average house price?

  3. Comparison Table: UK House price indices

  4. Problems with property price indices

  5. How the indices can help you

  6. Should you let all this affect your moving plans?

  7. Final thoughts

  8. Related guides

House prices + the media = Big problems

Although the media regularly report and comment on the property market, it is often done with a poor understanding of how the different property indices measure property prices.

The key measure is the ‘average’ price for regions and maybe towns and cities but, as property prices are so individual, these are unlikely to reflect what is actually happening to prices for the property you would like to buy or sell.

In addition, property indices tend to report price changes month on month or year on year so, as happened with the credit crunch in 2007, prices fell on average by around 17% to 2009, when prices started to recover the 17% fall, this was reported as price increases.

Example:

  • 2007 – property purchased for £200,000
  • 2007 – price fell to £171,000
  • 2009-10 – price rose by 10% to £188,100

Media reports a 10% price increase, despite property still being worth 6% less than purchase price.

In addition, although the ‘average’ may have risen by 10%, this may be made up of prices falling in some areas and rising by a lot more than 10% in other areas.

(Video) 8 Reasons UK House Prices Will Collapse

The ‘average’ property price and the percentage increase/decrease year on year is therefore not a good guide to what is happening to your own individual property markets.

What is the current UK average house price?

Sadly there’s no one definitive answer to that…

Here is a snapshot (Feb 2018) of the ‘average’ property price from six indices which are often quoted in the media:

Comparison: Reported UK average house prices

IndicesSnapshot - Feb 2018Annual changeWhat the index measuresAreas covered
Rightmove£300,001+1.5%Asking pricesE & W
Nationwide£210,402+2.2%Mortgages onlyUK
Halifax£224,353+1.8%Mortgages only, seasonally adjustedUK
Hometrack (ZPG)£211,100+4%Sold pricesUK
LSL Acadata HPI£299,556+0.6%Actual prices, includes cash saleE & W
UK HPI (Gov)£225,621+4.9%Sold prices, includes cash sales and new buildsE
  • As you can see, the highest ‘average’ price is marketing prices from Rightmove at £300,001 and the lowest ‘average’ price is Nationwide’s mortgage average of £210,402…
  • That’s an astonishing difference of nearly £90,000.
  • When it comes to looking at the property price changes these indices are quoting to the media this year versus last, it varies from 0.6% through to 4.9%.

Confusing isn’t it?

So which of the 6 indices are right and which can you trust?

The reality is, they’re all correct, according to three measures:

  1. Whether they measure properties across the UK, England and Wales or just England.
  2. The stage in which they record the price of the property and what type of transactions they include, for example mortgage only or including cash sales and new builds.
  3. How they calculate the average and which average measure they use.

I said it was confusing!

The best way to think about how much prices can vary is to consider what happens to a property’s price from 1st day of marketing up to completion of a successful sale.

For example, one property could, in theory, have four different prices recorded by the indices:

  • price #1: Asking price £199,999 (Rightmove)
  • price #2: Offer price accepted £190,000 (Hometrack)
  • price #3: Mortgage valuation £185,000 (Halifax/Nationwide)
  • price #4: Final agreed price £187,500 (UKHPI/LSL Acadata)

So the difference from the ‘asking price’ through to the ‘final agreed sale price’ recorded on the Land Registry is 6.2% (£199,000 – £187,500).

Comparison Table: UK House price indices

Comparison Table: UK House price indices

House price index:Compiled by:Data source:Coverage:Price recorded:Mix adjusted:Seasonally adjusted:Pros:Cons:Vested interest:Reliability:
Rightmove IndexProperty portalProperties for sale advertised by estate agentsEngland & WalesAsking pricesYesNoGives a 'lead indicator' of the current market , so 'movement trend' is usefulReports on prices of properties which aren't sold so 'average house prices' are ridiculously high versus actualSecures regular PROnly of use as a guide to whether prices may fall/rise in future, don't use the actual prices they quote
Nationwide IndexLenderOwn lending dataUKPrice agreed post mortgage valuationYesYesAccurate from a mortgage lending perspective and movementDoes not track cash sales, so low 'average'Secures regular PROne of the biggest lenders, so good track record
Halifax IndexLenderOwn lending dataUKPrice agreed at time of loanNoYesGood historic research analysisTends to suggest a 'higher' trend in price growth than other indicesSecures regular PRCan vary depending on volumes
RICS IndexSurveyorsSurveyorsEngland & WalesSurveyor valuations post offer stageNoYesA good lead indicator of supply/demand and what will happen to pricesDoesn't give actual prices, more a survey on independent valuers views of the marketPromotes RICSVery good, has proven to be a good indicator of future rises/falls in property market
HometrackAutomated valuationsSold price data & mortgage lending65 cities in the UKMix of mortgage valuations and price paidNoNoA good indicator of what's actually happening at a city levelNon comparable to other indicesPromotes Hometrack (now part of ZPG)Very reliable from a city perspective
LSL AcadataData consultancySold price data from conveyancersEngland & Wales (separate index for Scotland)Final sale priceYesYesIncludes most sales and accurate for movement each monthFigures change post publishingLSL has agency, but reports by Cambridge EconomistsReliable for what 'has' happened, not what is happening now
UK HPIGOV.UKSold price data from conveyancersUKFinal sale priceYesYesIncludes most sales eg. cash/new buildLags current market by some monthsNo biasReliable for what 'has' happened, not what is happening now

Number of transactions analysed

UK House Prices: What you need to know (in 2022) | TheAdvisory (4)

Problems with property price indices

  • The main problem with property price indices is they don’t help buyers or sellers to know whether the price of their property is more or less than it was bought for.
  • They also cover too wide an area, such as England or the North East or Greater London.
  • Today we find that property prices can vary for different property prices, even within a mile of each other.
  • For example, in one street, two-bed properties might always be in demand, so rarely lose value and tend to sell quickly for an ever-increasing price as more buyers are always chasing few properties.
  • Half a mile down the road, there may be lots of two-bedroom flats which were built a few years ago and opposite them some brand new ones, so lots of sellers chasing a few buyers.
  • Quite simply this will push prices down as sellers compete on price to secure a buyer.
  • Unfortunately, the property price indices are often reported verbatim in the press which tend to be more trusted than a local agent, despite the fact that a good local agent is really the best source to find out what is happening to prices for a property you want to sell and/or buy.

Check that estate agents are telling you the truth about your local market….

Check:PropCast™ – The UK housing market weather forecast

Why do house price indices differ?

There are 5 key reasons:

#1. Timing

Buying and selling property can take three to twelve months and, during this time, prices can vary.

Marketing prices tend to be the highest, while prices recorded at final sale tend to be lowest.

#2. Coverage

Some take data for the whole of the UK, others break it down, with some doing England and Wales only, while others separate out England, Scotland, Wales and N.Ireland.

#3. Property sales the data includes

Since the credit crunch, anything from 30-40% of property sales are cash only, not involving a mortgage at all.

Some indices include all sales, while others just include mortgage sales.

(Video) UK HOUSE PRICE CRASH 2022 - How BIG Will It Be?

#4. The ‘average’

You would think there was only one way to calculate an average, but there isn’t!

There are three ‘averages’ which can be quoted:

  1. Arithmetic mean
  2. Geometric mean
  3. Median

Here is how they are calculated:

Arithmetic mean – Let’s take a set of numbers eg. 5 & 10. To calculate the mean, you add up both numbers (5+10=15) and divide by 2 = 7.5.

Geometric mean – This is a little more complicated, but in our example of 5 & 10, you would take 5 x 10 and, as there are two numbers, you would take the square route of ½ power. The average in this case would be 7.

Median – If we take our two numbers of 5 & 10, the median would be similar in this case to the arithmetic mean ie 5 + 10 /2 = 7.5. However, if there were three numbers such as 5, 8, 10, the ‘median’ would actually be 8.

#5. Different adjustment methodology

The four you need to know are:

Mixed Adjustment– This isolates potentially misleading price changes, for example if more flats are sold one month to the next, or one region sells a lot more properties than another, these ‘anomalies’ are essentially ironed out.

Hedonic Regression– This does a similar job in that it checks the rise in average prices is a true one, not just influenced by more of one property type eg terraces selling more than eg detached homes.

Repeat Sales Regression(RSR) –Under the RSR method, house price growth is measured by looking at houses which have been bought or sold more than once.

The image below summarises key UK indices and shows the different adjustment methodology being used…

UK House Prices: What you need to know (in 2022) | TheAdvisory (5)

‘Seasonally Adjusted’is another term you’re likely to hear. This smooths out the figures to take into account of seasonal highs and lows. This has been criticised by some because it can lead indices to report ‘growth’ in the market when in actual fact, the market has ‘fallen’ on an ‘actual’ basis.But we’ll let the statisticians argue this one!

Why are house price indices misleading?

Simply, property price indices are misleading because they use an ‘average’ which is based on a lot of different properties and the movement of these averages doesn’t necessarily reflect what’s happening to the specific price of a property you are buying or selling.

What happens to prices relies mostly on the number of sellers chasing buyers and vice versa. Typically if there are more buyers than sellers for your property, prices will rise and if there are more sellers than buyers, prices fall. This is why local agents – the only people who understand this dynamic – are essential to advise you on property price trends.

However, to be fair to the indices, it’s not necessarily their data which is misleading, it is more the unnecessarily dramatic use of the headlines by PRs and the media.

Newspapers make their money based on the number of people who click on their articles online or buy the paper. Unfortunately headlines which tell the reality such as ‘prices expected to grow at their long term annual rate over the next five years’ do not gain as much interest as ‘house prices to rocket by 25% over the next five years’!

Some channels and property papers do report prices correctly, though. For example, the BBC teams, in the main, are very aware that property prices and changes differ dramatically across the country. And because they are based in London, Manchester and have local news channels, they tend to produce more ‘regional’ data than give a headline figure.

(Video) 2023 UK House Price CRASH - How Low Could They Go ?

However, even regional measures of the property can be misleading unless they are explained properly. The main conflict which occurs with house price indices is when they are rising rapidly or falling rapidly.

When they are stable over a period of time, despite the fact they measure property prices at different times of a purchase and sale, the indices tend to agree ‘prices are slowly rising’ or ‘slowly falling’.

But when prices are rising rapidly or falling hard, the Rightmove Index will measure sales prices which reflect what sellers feel at the time, so very current while the Land Registry could be reporting on property sales which happened 3-6 months ago, so they could still be measuring the market as rising.

So the more volatile the market, the more the property price indices will give a conflicting picture and it is not unusual for the media to say prices are rising one day and falling the next!

How the indices can help you

The indices are valuable tools when you know what each of them is good for…

For example:

Rightmove Index

  • This is useful data to tell us what sellers and agents ‘think’ is happening to the market.
  • If they report marketing prices are falling then it might not be the best time to sell your property, or if you have to sell, pricing keenly could ensure you get a sale when others are misreading the market and trying to ‘over price’ to get the best deal.

Hometrack City Index

  • This is a good report as it does tell you what’s happening year on year in 65 towns, so is quite specific and, as long as you work out if your property or the one you are buying rises and falls in line with local averages, then this might be useful to track.
  • If your property is unique though, then only a local agent can help guide you.
  • Or you can check out more micro location analysis and find out if your market is ‘hot’ or ‘cold’ by checking PropCast™.

Nationwide & Halifax Indices

  • These are useful to know what’s happening ‘now’ in the market from a rise/fall perspective as they tend to be weeks, rather than months behind what’s actually happening.
  • In addition they are based on independent valuations, not marketing prices which are typically the price sellers want and won’t necessarily achieve.

Land Registry/LSL Acadata

  • This data tells you ‘what has’ happened not‘what is’ happening now.
  • It’s historically accurate, but won’t necessarily tell you what is happening to property prices for a property you are buying or selling.

How positive & negative reports effect the market

What the indices can help you with is to understand if now is a good time to sell (or not).

Most buyers will hold off making offers if the media reports that the indices suggest property prices might fall, or are already falling, and especially if they report a potential crash.

When reports are negative, this happens:

  1. Buyers hold off
  2. Sellers panic
  3. Prices are reduced
  4. Indices pick up price reductions
  5. More buyers hold off
  6. Prices reduce

When reports are positive, this happens:

  1. Buyers panic and make offers quickly
  2. Sellers get greedy and put prices up to ‘test the market’
  3. Indices pick up price rises
  4. More buyers panic and compete prices upwards

These two scenarios carry on until sellers in a falling market stop putting their properties on the market, so demand falls and the number of properties available for sale falls and vice versa – more sellers put their property on the market hoping for a ‘great price’ and this overtakes the number of buyers.

How to think intelligently about house prices & market forecasts

Property prices, as we’ve seen, are not only incredibly difficult to assess, they are also very difficult to predict.

There are three main reasons for this:

#1. Property prices vary by property and postcode

Most experts try to predict property prices by UK, country and region.

However, as we have already seen, this is rarely applicable to what’s happening to individual properties in the area you own or are buying and selling in.

#2. Property prices are influenced by many factors

One of the reasons property prices are so individual and rarely fit an ‘average’ measurement is because there are so many factors that influence what a property is worth.

For example:

  • Land prices and availability
  • Supply and demand
  • Infrastructure
  • Developer capacity
  • Mortgage availability
  • Economic performance
  • Wages and employment

On top of these there is one very big influence which makes property price changes the most difficult to predict and that is…

Consumer confidence!

(Video) UK mortgage rates: What should you do?

If confidence in buying or selling a property falls, then it’s likely that prices will fall as a result.

This is so difficult to predict as we found during the credit crunch when stories went from ‘prices rising’ to ‘prices falling’ in a matter of months.

And the opposite can happen. As soon as the government announced the Help to Buy Scheme in March 2013 (which provided up to a 20% loan free of any interest for 5 years), people started to consider moving, even if they weren’t eligible for the scheme.

This announcement helped to ‘turn’ the property market in many places across the country and reinvigorated the market in many areas so prices started to increase post the crash.

#3. Shortage of data

This is a problem for those who are considering predicting prices as the most comprehensive data we have – which is the price achieved for every property on every street which has been bought and sold – only goes back nearly 20 years.

In comparison, for other things regularly predicted such as inflation, interest rates or economic performance, we have data going back for decades and, of course, ‘averages’ for these measures work a lot better.

In other words, forecasting property prices is hard as we are still learning what drives prices up and down.

Should you let all this affect your moving plans?

It is worth knowing what the property indices are saying and what the experts are predicting.

The reason being is this will influence what the media reports and it is these reports that will often influence the supply and demand of buyers and sellers, especially in the short term (a few months).

If the predictions are that prices are going to fall and you are thinking of selling, it might be better to sell sooner rather than later.

However if you are buyer, you have a dilemma. Do you make an offer on the property of your dreams, taking the risk that it may fall? Or do you buy the property now so someone else doesn’t , to avoid missing out on the property for many years to come?

In reality it’s worth taking the predictions into account but, if you are planning to live in the property for the next 10-20 years, it shouldn’t influence you too much as typically property prices will rise and fall during this period.

For most, getting the right roof over your head at a price you can afford is often more important than trying to time when you enter or exit the market.

Final thoughts

House price indices give a useful guide to what has happened on a National & Regional level, but it is unlikely they will explain what’s happening (or happened) to the value of your property (or the one you’re looking to buy).

Although the media create a lot of articles and commentary from these indices, few media outlets give an accurate or well understood guide to what’s really happening to prices.

Many in fact will exaggerate the figures and use them to sell newspapers as opposed to educate and inform you on the property market.

As such, the two best ways to understand what is happening in your area are to:

(Video) How Far Will House Prices Fall?

  1. Find out if your property market is ‘hot’ or ‘cold’ by checking PropCast™
  2. Speak to an expert local agents who will give you an honest assessment of what’s happening in your market.

Related guides

  • How to add value to your home
  • How much is my house worth?
  • The truth about your Zoopla valuation

FAQs

How much over asking price should I offer on a home 2022 UK? ›

How much over asking price is too much? In a hot market, experts recommended offering at least 1% to 3% above the asking price in a bidding war. But today's home buyers may face less competition. In June 2022, the average home actually sold for about 1% below its list price, according to Redfin.

Will UK house prices drop in 2022 UK? ›

It said house prices will have risen 6 per cent by the end of 2022 but that they will fall 5 per cent in 2023 and a further 5 per cent in 2024 as a result of the sudden spike in mortgage rates caused by the government's fiscal plans. This would take house prices back to where they were last summer.

Is 2022 a good year to buy a house UK? ›

Rising inflation and costs do mean house prices could fall, though it is “unlikely that house prices will crash”. Property site Rightmove says that house prices could fall slightly towards the end of 2022, although it predicts that prices could still be 5% higher than they were at the end of 2021.

Will there be a drop in house prices in 2022? ›

The current economic conditions mean that it is growing increasingly likely house prices will start to fall in 2022.

How do you win a bidding war house in 2022? ›

Several factors can make or break whether you win a bidding war on a house. Getting preapproved for a mortgage, making the highest offer on the home and dropping your contingencies are a few ways you can show the seller that you're a serious buyer and, hopefully, encourage the seller to accept your offer.

How do you win a bidding war on a house UK? ›

Useful tips to help survive a bidding war
  1. Consider how much you can afford to spend.
  2. Present yourself as a serious buyer.
  3. Keep your budget private.
  4. Be prepared in case you need to make a sealed bid.
  5. Don't be afraid to change or withdraw your offer.
7 Apr 2021

Should I buy a house now or wait until 2022 UK? ›

In fact, most house price indexes predict a small increase — up to 5% — over the course of the year. Due primarily to the pandemic and its impact on the economy and household finances, the outlook for the UK housing market in 2022 remains uncertain.

Is it smart to buy a house right now? ›

Based on data, now is a good time to buy a house — and first-time buyers agree. According to Fannie Mae's National Housing Survey, more than 60% of renters would buy a home if their lease ended. Most expect rents to rise sharply in the next 12 months. The housing market may favor Fall home buyers.

Will UK house prices ever fall? ›

House prices in the UK are likely to fall by at least 10% next year as mortgage providers pull deals and raise interest payments to levels not seen since before the 2008 financial crisis, property experts have predicted.

Are houses overpriced right now UK? ›

Average UK house prices hit a record £296,000 in August 2022, £36,000 higher than the same month a year earlier, according to figures from the Office for National Statistics (ONS). The ONS said house prices grew by 13.6% over the year to August, down from a peak of 16% a month earlier.

Should I wait until 2022 to buy a house? ›

Don't expect much relief in the form of lower rates in the coming months. Therefore, it certainly does not seem to be a good time to buy a house as rates have risen much more rapidly in 2022 than most industry analysts and economists had initially predicted.

Should you wait to buy a house in 2022? ›

Unsurprisingly, many home buyers are left wondering: Is buying a house still worth it in 2022? The short answer is yes. If you're financially ready, buying a house is still worth it — even in the current market. Experts largely agree that buying and owning a home remains a smarter financial move than renting for many.

Will there be a housing crash in 2022 UK? ›

This could in turn push average mortgage rates upwards of 8% (while still historically low, that is more than double the 1.6% rate recorded at the end of 2021) Based on this data, Capital Economics has forecast house prices to rise throughout 2022, before falling by 5% in 2023.

When was the last property crash UK? ›

In the most recent recession in the UK, during the financial crisis in 2008, UK house prices dropped by more than 15% in the year to February 2009, according to data from the Office of National Statistics (ONS). By March 2009, UK house prices averaged £154,452, having fallen from £185,782 in January 2008.

Is now a good time to buy a house Martin Lewis 2022? ›

Martin Lewis has issued a fresh warning to home buyers as rates are expected to rise 6% in 2023. The Money Saving Expert founder has advised that first time buyers should not be buying a house right now unless they are prepared and plan to live in the home for the long term future.

Do sellers always pick the highest offer? ›

This can happen for a variety of reasons, but the simple answer is “no.” In real estate transactions, the seller can choose the offer they want and there is no obligation to accept the offer with the highest price. In fact, the seller is not obligated to accept any offer.

How do you win a bidding war before it starts? ›

9 ways to win a bidding war
  1. Find out what the seller wants. ...
  2. Get a preapproval or precommitment for a mortgage. ...
  3. Be flexible with the timing. ...
  4. Offer a large earnest money deposit. ...
  5. Be a cash buyer. ...
  6. Offer concessions to the seller. ...
  7. Offer an appraisal gap guarantee. ...
  8. Write a 'love letter' to the seller.
11 May 2022

How do you avoid a bidding war when buying a house UK? ›

Submit proof of the market and comparables if you're offering less than the asking price, but be aware that anything under the asking price opens the door for a bidding war. Offer above the asking price if interest in the property is high and your mortgage preapproval covers the higher price.

How do you win a house with multiple offers UK? ›

A third of homes for sale are attracting multiple offers: 5 tips for winning a bidding war
  1. Have a mortgage in principle ready. ...
  2. If you're not in a chain, highlight it. ...
  3. Organise your solicitor before putting in an offer. ...
  4. Put your offer in writing and add a personal touch. ...
  5. Be ready to increase your offer.

How do you make a cheeky offer on a house? ›

The trick to putting in a cheeky offer that is 15% below the asking price is to look at the number of days the property has stayed on the market. Properties that have been on the market for less than 3 months are seen as being fresh, so such a cheeky offer could end up being offensive.

How do you win a final and best offer? ›

The key to winning a best and final offer is to present yourself in the best position to match the future plans of the seller, meaning that buyers should try to establish a seller's motivations for selling.

Will 2023 be a good year to buy a house UK? ›

Would falling house prices improve affordability for prospective buyers? Economic consultancy Centre for Economics and Business Research (Cebr) said it expects house prices to fall by 4.5% on average next year, with a peak annual contraction of 6.2% expected in Q3 2023.

Is it wise to buy a house in 2023? ›

If you buy a home in 2023, you get more time to save for a down payment, which might help to lower your monthly payment once you get a mortgage. You may also benefit from a further increase in housing inventory, which means more choices and fewer bidding wars that drive up prices.

Is 2023 a good time to buy a house? ›

Despite housing prices expected to drop in 2023, it will become more expensive to purchase a home. According to a new projection from Freddie Mac, the for-sale cost of a home is expected to drop . 2% in 2023.

What will happen to house prices in 2023 UK? ›

“The most likely outcome for 2023 is that we see a fall in mortgage rates towards 4% with a modest decline in house prices of up to 5%. The labour market remains strong and the supply of homes for sale is below average creating a scarcity of homes for sale that will support pricing.”

How do you buy a house when the market is overheated? ›

How to Buy a Home in an Overheated Market: 4 Strategies
  1. Go Under Budget, Over Asking. ...
  2. Use Houwzer's Cash Advantage Program. ...
  3. Don't Drop the Inspection Contingency - But Massage it a Little. ...
  4. Waive Financial Contingency. ...
  5. Buying a House in a Seller's Market is Difficult, but Doable. ...
  6. For Further Reading.
11 Mar 2022

Is it OK not to buy a house? ›

If you're thinking of buying a house, there are at least 10 good reasons not to buy one. Some of the reasons include: not having a down payment, having bad credit or a high debt ratio, having no job security, and renting being 50% cheaper.

How much did the 2008 housing market crash UK? ›

Financial Crisis (GFC) were dramatic and swift. The average UK house price fell by 20% in 16 months. Transaction levels, which had averaged 1.65 million a year in the previous 10 years, fell to 730,000 in the 12 months to the end of June 2009.

Will interest rates cause a house price crash? ›

However, history has proven time and time again that by themselves, higher mortgage interest rates do not lead to home price declines. We look at the historical evidence and conclude that, in the absence of a major recession, home prices nationwide are likely to decelerate sharply, but are unlikely to fall.

Can house prices increase forever? ›

Sure, anything “can” happen. There are lots of major cities after all and some will rise while others may fall. It's my opinion that real estate prices in major cities “will” continue to rise with the on-going trend of urbanization, unabated besides a brief detour during COVID.

Will the cost of living go down? ›

So consumers can expect that this year will be the worst for inflation, with prices estimated to go down by 2023, according to the latest Morningstar research.

What price is stamp duty? ›

The stamp duty rate ranges from 5% to 12% of the purchase price, depending upon the value of the property bought, the purchase date and whether you are a multiple home owner. Anyone purchasing an 'additional' residential property will be charged a 3% surcharge on each of the threshold bands.

Is the flat market in the UK broken? ›

The London flat market has been hit badly by the absence of overseas buyers who have been unable to travel to view properties during the pandemic. “Flats have been the flavour of the past ten years because they appeal to the international market.

Why you shouldn't buy a house right now? ›

“You cannot time the market, and a home should be a long-term investment. A year from now, even if prices come down slightly, mortgage rates will most likely be higher. In the end, that will cost a buyer more monthly if they are financing.” Rising rates can spell serious trouble for your monthly budget.

What is the best month to buy a house? ›

Lowest Home Prices Are Typically in January

Median sales prices are more affordable between October and February compared to other months of the year. For example, January 2021 had sales prices listed at $329,242, which peaked at $385,546 in June 2021.

What is the best time to buy a house? ›

Outside of winter, a fall purchase can be ideal for cash-strapped home buyers. Once summer ends, sellers get more motivated. They usually lower their prices and provide an opportunity to get a deal. As is the case with winter, there's also less inventory during the fall.

Is it better to build or buy a house 2022? ›

Is it cheaper to build or buy a house? As a rule of thumb, it's cheaper to buy a house than to build one. Building a new home costs $34,000 more, on average, than purchasing an existing home. The median cost of new construction was $449,000 in May 2022.

What age should you buy a house? ›

The best age to buy is when you can comfortably afford the payments, tackle any unexpected repairs, and live in the home long enough to cover the costs of buying and selling a home. Legally, you must be at least 18 in most states to buy a home.

Will mortgage interest rates go down in 2023? ›

But the upshot for homebuyers is that mortgage rates are expected to come down next year, Fratantoni said. MBA is forecasting mortgage rates to end 2023 at around 5.4%. The average rate for a 30-year fixed rate mortgage is currently 6.94%, according to Freddie Mac.

Will there be a housing crash in 2023 UK? ›

Home values are expected to rise 8.9% cumulatively over the next five years, however before those gains can take hold, 2023 will likely deliver a property price fall of 6%, the real estate investment firm forecast.

Will house prices crash in 2023? ›

House prices will not crash next year, though the number of transactions will fall sharply, major agency JLL predicts. The housing market is set for 'a correction' in 2023 that will see a 6% reduction in property prices, not the 20-30% drop some feared.

What will happen if the housing market crashes? ›

During a housing market crash, the value of a home decreases. You will find sellers that are eager to reduce their asking prices.

Will house prices rise in next 5 years? ›

It said house prices will have risen 6 per cent by the end of 2022 but that they will fall 5 per cent in 2023 and a further 5 per cent in 2024 as a result of the sudden spike in mortgage rates caused by the government's fiscal plans.

How much did a house cost in 1970 UK? ›

The 1970s were a more turbulent decade. In the early 70s, the average house price was £4,975 and by the end, it was £19,925. It was during this decade that the gap between average wages and house prices grew wider making homes less affordable.

What causes house prices to drop? ›

The main factors that cause a fall in house prices involve: Rising interest rates (making mortgage payments more expensive) Economic recession / high unemployment (reducing demand and causing home repossessions). Fall in bank lending and fall in availability of mortgages (making it difficult to buy).

Is it the right time to buy a house UK? ›

Rising inflation and costs do mean house prices could fall, though it is “unlikely that house prices will crash”. Property site Rightmove says that house prices could fall slightly towards the end of 2022, although it predicts that prices could still be 5% higher than they were at the end of 2021.

What's happening with right to buy? ›

Right to Buy latest

The Government has proposed to extend the Right to Buy to Housing Association tenants. The National Housing Federation is currently working with the Government to establish how this will work in practice.

What's going to happen with mortgage rates? ›

Mortgage rates may continue to rise in 2022. High inflation, a strong housing market, and policy changes by the Federal Reserve have all pushed rates higher this year. However, if a serious recession comes on, we could potentially see a dip in mortgage rates.

How much over asking price are houses selling for UK? ›

NAEA's report shows that 38%* of homes sold for more than their original asking price, which is up by almost 20%* in two months. In November 2020, just 10%* of properties sold for more than their asking price, which is a clear sign of the soaring housing market in 2022.

Should I offer asking price 2022? ›

In this guide, we'll discuss how to negotiate the price and make the right offer. In general, it's best to offer 4-8% below the asking price on a house, assuming its asking price is close to the fair market value. This will give you some room to negotiate while not insulting the seller with a low-ball offer.

How much should you offer over the asking price? ›

As with all negotiations, when you are making an offer on a house, start low. A good rule of thumb though is to offer 5% to 10% lower than the asking price. Don't forget that sellers often take this into account and deliberately put their house on the market for more than they expect or would accept.

Is 20k over asking enough? ›

This is an obvious way, and it's often the ultimate result of bidding wars. Offering $20,000 above the asking price can still mean you're getting a good deal, Conti says.

Should I buy a house now or wait until 2022 UK? ›

In fact, most house price indexes predict a small increase — up to 5% — over the course of the year. Due primarily to the pandemic and its impact on the economy and household finances, the outlook for the UK housing market in 2022 remains uncertain.

Are houses overpriced right now UK? ›

Average UK house prices hit a record £296,000 in August 2022, £36,000 higher than the same month a year earlier, according to figures from the Office for National Statistics (ONS). The ONS said house prices grew by 13.6% over the year to August, down from a peak of 16% a month earlier.

How do you make a cheeky offer on a house? ›

The trick to putting in a cheeky offer that is 15% below the asking price is to look at the number of days the property has stayed on the market. Properties that have been on the market for less than 3 months are seen as being fresh, so such a cheeky offer could end up being offensive.

How do you win a best and final offer UK? ›

The key to winning a best and final offer is to present yourself in the best position to match the future plans of the seller, meaning that buyers should try to establish a seller's motivations for selling.

How do I make my house offer stand out? ›

There are other ways to show financial strength that don't involve raising your offer price.
  1. Put down a strong down payment. ...
  2. Put down a higher earnest money deposit. ...
  3. Offer to pay some (or all) of the sellers' closing costs and title insurance fees. ...
  4. Include a pre-approval letter. ...
  5. Home inspection contingency.
23 Jun 2021

How do you make a strong offer on a house? ›

10 Agent Tips For Making A Strong Offer On A House
  1. Check Your Client's Preapproval And Prequalified Status. ...
  2. Make The Best Offer. ...
  3. Encourage Clients To Write A Personal Letter. ...
  4. Be Flexible With The Closing Date. ...
  5. Submit A Clean Offer. ...
  6. Offer To Help With Closing Costs. ...
  7. Offer More Earnest Money. ...
  8. Submit Offers With More Cash.

Should you always offer below asking price? ›

Many people put their first offer in at 5% to 10% below the asking price as a lot of sellers will price their houses above the actual valuation, to make room for negotiations. Don't go in too low or too high for your opening bid. If you make an offer that's way below the asking price, you won't be taken seriously.

How do I convince a seller to accept my offer? ›

To have the best chance at getting your offer accepted, check out these 5 must-do tips.
  1. Get pre-approved & provide proof with your offer. ...
  2. Offer more earnest money. ...
  3. Discover seller's motivation to help structure your offer. ...
  4. Shorten the due diligence period. ...
  5. Make the offer as "clean" as possible.

What is a strong offer on a house? ›

If you're ready to buy a home, you're probably wondering about how to write “a strong offer.” When we say “strong offer,” we're talking about writing the best offer – an offer that's going to have the best chance of getting chosen by the seller.

Should I offer full asking price on a house? ›

Although all home prices are technically negotiable, there are good reasons to offer the full list price on a home you want. Offering the full price can make the seller and their agent more eager to cooperate throughout the sales process.

Are houses selling for asking price? ›

Homeseller were achieving 80% of asking price at the start of this year, but this has now climbed by 13% to 93%.
...
London property sales see 6% increase in asking price.
Table shows percentage of asking price achived and changeLocationLondon (overall average)
% of asking price – Q1, 202185%
% of asking price – Q2, 202191%
Change (%)6%
35 more columns

How much should you offer on a house UK? ›

It is common to offer 5% to 10% below the asking price. Sellers expect buyers to offer less than the asking price and value it accordingly. Start negotiations with an offer below your maximum budget and always do your homework first.

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5. Are house prices falling? ONS Property market update October 2022
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