House prices keep going up and mortgage rates are on hold l Vesta blog

House prices keep going up and mortgage rates are on hold

November 19, 2021

A typical home in the UK is now worth over £250,000 and the average property price is up by more than £30,000 since the pandemic struck in March 2020, according to the latest research provided by Nationwide. Adding to this, house prices are up a further 0.7% month-on-month which means the annual house price growth remains elevated at 9.9% in October.

The growth is continuing, however, some caution also needs to be factored in if you are holding off selling or thinking of buying. There may be signs that growth is already starting to slow with October's growth marginally down on September's 10%. The expiry of the stamp duty holiday at the end of September has had little impact and demand for homes continues to be strong. There is still a shortage of homes on the market, and according to Nationwide, mortgage applications in September are 10% above the monthly average in 2019, so we should continue to see a lot of activity.

The economic outlook remains very uncertain, and it is likely that this will have a dampening effect on both price and transactions. The unemployment rates are holding and we are yet to feel the full impact of the withdrawal of Government support measures.

Probably the biggest factor that could slow down growth will be mortgage interest rates. Last week the Bank of England's Monetary Policy Committee (MPC), which was widely expected to vote for an increase in the bank base rate, decided to hold at 0.10% for now by a resounding vote of 7-2. This is great for those homeowners and landlords that still want to fix however they should move quickly as many of the analysts believe rates are likely to start going up soon.

The lack of stock available on the market is continuing to drive robust prices for now but when interest rates start going up, affordability for those already on the ladder and those wanting to get on will cool the market quickly. As mentioned in a previous newsletter, mortgage providers and valuers will also start to take a much more cautious approach considering rates increasing.

If you are considering selling or buying an investment property or simply want an investment valuation, please get in touch, or visit so we can start the process with you.

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