When the Equity Release Council published the astounding statistic in April this year that £1 million was added to the value of UK housing every minute in 2021, a natural reaction was to consider whether this rate of value growth could continue this year.
As we close the first quarter of 2022, figures have started to arrive that show us whether momentum has been maintained in the first three months of this year. More importantly for those looking to buy, sell and rent imminently, we examine what has happened to house prices and rental values in the last four weeks.
House prices: homeowners see prolific price growth
The year got off to a stellar start with house prices continuing to climb after the Christmas break. Zoopla reported a rise in property values of 8.4% in January, followed by 8.1% in February. The property portal added that buyer demand was unseasonably high. This is excellent news for potential vendors who can instruct now and find themselves in a ‘sellers’ market’.
Spring market supercharged for sellers
Conditions are so favourable that fellow portal, Rightmove, has declared the ‘best ever spring sellers’ market’, with the ‘greatest imbalance between buyer demand and the number of properties available for sale’ that it has ever measured at this time of year.
As well as more than twice as many buyers as there are sellers, Rightmove says the chances of sellers finding a buyer for their property in the first week of marketing is the highest ever – twice as likely when compared to the same spring period in 2019.
Prevailing buyer demand is impacting not only how much properties are selling for but how quickly their value is rising. Data analysis by Nationwide found that annual house price growth in the UK continues its upwards trajectory, running at 14.3% in March, up from 12.6% in February. This is the strongest rate of increase measured since November 2004.
When looking at month-on-month value growth, the lender found the price of property had increased by 1.1% during the last four weeks – the eighth consecutive month of value uplift. In comparison, Rightmove has the house price increase for March at 1.7%.
When it comes to the property type that has seen the most value added, Nationwide say it is the detached dwelling – now almost £68,000 more expensive since the start of the pandemic. In comparison, the average flat price has risen by £24,000 in the same period.
Rental values rise in every region
The cost of renting a property in March 2022 became more expensive as it too suffered from the same malaise as the sales market – a lack of available stock. Data from HomeLet’s March Rental Index revealed the average rental price for a new tenancy in the UK is 8.7% more expensive than in March 2021, with tenants paying an average of £1,078 per calendar month.
Goodlord’s latest Rental Index, published in March 2022, reinforced the trend. It found the average cost of rent across the country rose by 4% between February and March this year, with every region recording a rise. It also reported that monthly rents had risen from £968 to £1,006 per property, on average – a high not seen since 2021.
Voids down, tenant salaries up
While rents are rising, something very important is dropping – void periods. During March, Goodlord found average void levels across England hit their lowest levels since August 2021 – a reduction of 11% from 18 to 16 days, on average.
Landlords can also take heart that tenants’ wages are keeping pace with rental value rises. In March, the average tenant salary rose 2.7% – the highest average salary rate for England ever recorded by Goodlord’s index.
If you would like a more localised property market report reflecting the area where you live, please get in touch.
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