What does the latest house price data mean for you?

What does the latest house price data mean for you?

By Ellie Isaac

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Will your home keep rising in value? Should you hold off from moving? And will there be a housing crash? Here’s what the latest data from our House Price Index means for you.

There’s a lot of noise around the UK housing market. And it can be hard to know when to stick, twist or make your dream move.

Richard Donnell, Director of Research and Insight, answers some of the most common questions about the UK housing market and how it will affect your home or move.

Will my home continue to rise in value this year?

“The vast majority of UK homes have risen in value over 2022 and most will continue to do so over the rest of the year, albeit at a slower pace.

“The outlook for home values really depends where you live and how affordable homes in your area are, compared to the wider market and nationally.

Read the latest House Price Index

“Price growth is much lower in the more expensive parts of the UK where prices are high and many times the average salary. If you live in London or the South East, you’ll see a slower rate of growth.

“But if you live in a more affordable area, there’s much more room for prices to increase. Even if mortgage rates keep rising.

"So if you live in Wales, the South West or the East Midlands, you’ll continue to see strong growth in the value of your home in the second half of the year."

Track your home's value

Is now a good time to put my home up for sale?

“The average homeowner moves once every 20 years. It’s a big decision and is likely to be linked to what’s happening in your life, whether it’s finding a partner, starting a family or retiring.

“Lots of people worry about timing their move with market trends but this is rarely a successful approach.

“It's all about whether it’s the right time for you and your family.

“Beyond that, it’s about getting the best advice to make your move successful.

“The most valuable thing you can do is speak to an estate agent long before you want to make your move.

“Agents are always willing to give would-be sellers advice on the market. They can also recommend what you can do to make your home as attractive as possible to buyers.

“Don’t wait until you’re ready to put your home on the market or have found your next home.”

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If I put my home on the market now, how long will it take me to sell?

“The average time to sell a home across the UK is currently 21 days. This compares to 22 days a year ago. 

"That’s 21 days from listing your home to accepting an offer. It could be a further 1 to 3 months for the legal side of things to go through. 

“But keep in mind that the average sales period varies market to market and by price level.

 The locations where homes sell the fastest

“Ultimately, the time to sell a home will depend on each home and its asking price – and how closely this is linked to what buyers in the area want to pay.

“While the market has been hotter than normal recently, more expensive homes tend to take a little longer to sell. It’s the same for homes that are a little out of the ordinary from the typical three bedroom semi-detached house."

Which types of properties are most in demand at the moment?

“Three bedroom houses have been the most in-demand properties in the last three months.

“44% of all enquiries on Zoopla are for three bedroom houses.  The pandemic has driven a ‘search for space’ which has boosted interest in these family homes. 

“But cities tend to have a greater supply of smaller homes and apartments, and this is matched by greater demand for them. This is particularly the case in London and Scotland, where apartments are most in demand.”

Will there be a housing crash?

“We can never say never, but no – we don’t think there will be a housing crash.

“Double digit falls in average prices are highly unlikely, even as we face higher mortgage rates and increases in the cost of living.

“House prices only tend to fall when there are forced sellers. That’s people who can’t afford their mortgage and have no option but to sell.

“But in the UK, less than half of homeowners have mortgages. 85% of those who do have mortgages are on fixed rates for 3 to 5 years. This insulates the market from short-term changes in mortgage rates.

“We already have tough affordability checks for buyers, too. History shows that falling house prices tend to be preceded by looser lending standards. 

“For these reasons, we expect slower rates of growth or flat prices rather than big price falls.

“It would take interest rates rising much higher or for the strong labour market to turn on its head before we saw a housing crash.”

I’m a first time buyer. Should I buy now or hold off?

“At a time of increased uncertainty, like now, some first time buyers are waiting as they think homes may become cheaper.

“But the reality is that there have only been 31 months with house price falls in the last 20 years. Those months were all between 2008 and 2012.

“So I wouldn’t wait and hope for homes to become cheaper. Prices are set to keep rising slowly in most places.

“If you think your household income will be steady or rise over the next 2 to 3 years, there’s limited point in delaying.

“Just spend plenty of time doing your research. Find a home that meets your needs and for which you feel you’re paying a fair price. Get advice about mortgage finance to help with this.”

Work out what you can afford when buying a house

I’m looking to downsize. Will I be better off moving now or later?

“In my opinion, worrying about the housing market and what will happen to prices should come second to your personal motivations for moving.

“You might’ve realised you have too much space or are facing high running costs.

“You might want to move closer to friends and family. Or look to take some equity out of your current home to fund your retirement or specific purchases.

“Whatever the market’s doing, there are ways to maximise the value of your home when you sell.

“It starts with talking to a local estate agent. They can tell you what buyers are looking for and what you can do in the current market to get the best sale result.”

How much equity is hidden in your home?

I’m a homeowner. What do rising interest rates mean for my mortgage?

“85% of people have opted for a fixed rate mortgage in the last few years, often up to five year terms.

“If you still have several years left on your fixed term, interest rate rises won’t impact you until then.

“But higher mortgage rates will be an issue if you are coming to the end of your initial term for your fixed rate.

What changing interest rates could mean for you

“It pays to shop around and look for the best mortgage from different lenders. But keep in mind that lenders always look to offer their current customers some of the best deals.

“It’s probably unrealistic to expect a fall back to the low mortgage rates we’ve seen in the last few years.

“But even with the recent increases, borrowing costs are low by historic standards.”

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