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Current UK House Prices Coming Close To 4 Year High

Sellers are reluctant to list their homes for sale, while buyer appetite continues to rise, driving up house prices, according to our latest House Price Index.

UK house prices have reached an almost four-year high, with the average home now worth £223,700.

The pandemic is restricting the flow of homes coming onto the market, as potential sellers are reluctant to list.

What’s happening to house prices?

UK house price growth has hit 4.3%, the highest since April 2017. Momentum is coming from northern regions, where property is more affordable.

At a country level, Wales has the highest growth rate, with house prices rising 5.4% year-on-year.

And at a city level, Liverpool’s house prices are climbing the most, up 6.3% on a year ago. That’s the fastest rate of house price growth in 15 years. Manchester is hot on its heels, with house prices up 6% year-on-year.

All cities monitored by House Price Index recorded house price growth apart from Aberdeen, where prices dropped by 2.4%.

Which regions are seeing decade-high house price growth?

House price growth has hit a 10-year high in the north east, north west and Yorkshire & Humber, driven by strong buyer appetite and affordable property.

In fact, growth in these regions is running at the highest rate since before the global financial crisis, with house prices rising between 3.8% and 5.4% a year.

House prices are climbing in southern regions too, but property is less affordable, acting as a drag on growth.

In London, house prices are 2.9% higher over the last year – but this pales in comparison with the 20% annual growth rate recorded in July 2014.

What about buyer appetite?

Despite the third national lockdown, demand for homes to buy was 13% higher in the three-odd weeks between Boxing Day and 17 January than the same time a year ago. And the number of new sales agreed was also 8% up on last year.

There’s traditionally a seasonal bounce in activity at this time of year. But the pandemic has added extra impetus this year.

With more time spent at home, many people are carrying out a once-in-a-lifetime re-evaluation of their homes and lifestyles.

Some buyers have been motivated by the stamp duty deadline too. And rising house prices have also meant that people have more equity in their homes, adding further impetus to move.

What does this all mean for home movers?

The combination of a lack of new homes for sale, rising buyer appetite and more new sales being agreed means that the overall number of homes for sale is 6% down on this time last year.

Not only is this reducing the choice of homes on the market, it's intensifying competition among buyers, and keeping an upward pressure on house price growth.

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