London house prices: property hits an all-time high as cost of living set to rise

The average home cost in the UK was?270,700 in November. However, this was a record high and less than half the national rate of 10%. The average home cost in the UK was?270,000. This is partly due to the fact that average London home now costs?520,000. This limits affordability and thus price growth. We expect prices to continue rising in 2022, but at a slower pace than in 2021, as market conditions normalize. The most serious risk to the outlook going into 2022 is the pressure on the cost-of-living. Also released this morning are figures showing that inflation in December jumped to its highest level in 30 years. This could impact consumer confidence and reduce willingness to make major financial decisions such as buying a house. “The Bank of England could also increase interest rates in the coming weeks to control inflation. This could reduce affordability and decrease demand. Director of Antony Roberts’ Richmond estate agency, Phillip Stevens, said that November was a normal month. Prices rose after October’s dip, which occurred following the end to stamp duty holiday. There is ample evidence that buyer demand is strong, especially for houses. It is a seller’s market with very little stock. The interest rate increase has not affected buyers’ confidence or their ability to buy property. However, with inflation at a 30-year-high, that could change. “Those who want to make their move sooner than others will be eager to do so, but it will depend on which stock launches on the market this spring. “READ MORE
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Mark Harris, chief executive at SPF Private Clients mortgage broker, stated: “Despite the global recession, the housing market was able and still is thriving last year. “Squeezed affordability would prevent first-time buyers from getting on the property ladder. However, the Bank will be mindful of the fact that a series of significant rate increases could prove extremely detrimental to the wider economy as we emerge from a pandemic. “Low mortgage rates are one of the main contributors to the housing boom. Although some lenders are raising mortgage rates due to higher money market rates but pricing is still competitive,