The current state of the UK property market
House prices in the United Kingdom are on the rise, but for how long? According to recent figures, the average UK house price was £296,000 in October 2022, up 12.6% from a year ago. This increase was partly caused by a sharp fall in UK average house prices in October 2021, after changes to Stamp Duty Land Tax came into effect. Let’s take a closer look at what this means for property investors and homeowners.
The factors that are driving house prices up
As property prices continue to rise, the forces driving this change have come into sharp focus.
- Rising interest rates
One of the main factors that will push house prices up in 2023 is rising interest rates. As interest rates rise, so does the cost of borrowing money, which makes it more expensive to buy a house. Additionally, as interest rates rise, people are less likely to invest in property, as there are other investment options that become more attractive when interest rates are high.
- Economic growth
Another factor that will push house prices up in 2023 is economic growth. As the economy grows, more people have jobs and disposable income, which they can use to buy houses. Additionally, as the economy grows, businesses expand and need more office space, which drives up demand for commercial property and pushes prices higher.
- Population growth
Population growth is another factor that will push house prices up in 2023. As the population grows, there is more demand for housing, which drives up prices. Additionally, as the population grows, more people are moving to urban areas where housing is more expensive.
- Limited supply
Another factor that will push house prices up in 2023 is limited supply. As the population grows and demand for housing increases, there is less available land on which to build new houses. Additionally, many people are choosing to renovate their existing homes rather than move to a new one, which further reduces the supply of houses on the market.
- Government incentives
Finally, government incentives may also push house prices up in 2023. The government may provide tax breaks or other financial incentives for people to buy houses, which would increase demand and push prices higher. Additionally, the government may invest in infrastructure projects that improve the desirability of certain areas and drive-up prices
What this means for investors?
The property market has seen a significant uptick in prices in the past few years, however it’s been projected to fall 8%-10% during 2023.
Some economists predict that this is just a temporary fall with property prices expected to increase again by an astounding 17% by 2030. One could argue, this is history merely repeating itself. Why? If we look back at the 1980’s, according to the official gov.uk data, there was a large 5-year increase between 1985 and 1990, when average house prices increased by 109% to hit a peak of £58,250. However, what followed was the only dip in average house prices, falling by 5%, which brought the average house price down to £55,437 in 1995.
This could be great news for the savvy investor, provided he positions him/herself in the right way; not only will they benefit from increased property values but can also look forward to potential returns of investment as property requires less maintenance than other kinds of investments. Despite the uncertainty that comes along with any kind of investment, property is looking like a safe bet in 2021 and beyond.
How to take advantage of the current market conditions
The stock market can be unpredictable at times, but you can still make educated decisions to get the most out of investing. While market conditions are continually changing, there are still reliable strategies that can help you capitalize during a volatile period. To take advantage of current market conditions, it may be wise to consider diversifying your investments and researching stocks carefully.
Additionally, having a long-term perspective rather than focusing on quick gains can help you make goal-oriented decisions. Lastly, staying informed of economic news and tracking your portfolio regularly will ensure you’re as up-to-date as possible and have an optimal strategy in place when market changes occur. Always consult a financial advisor for investment advice.
Final thoughts...
As the UK property market continues to show its resilience and strength, investors can take advantage of these conditions by staying informed and investing in what makes sense.
It seems that there is an increased demand for property at the moment, meaning good value investments are out there for those willing to look. And due to the reduced number of new houses being constructed, the competition between buyers is higher which can in turn increase prices. It’s definitely worth considering what impact this could have on property investments now and in the future.
To get started, sign up to Properkeys Limited – here we’ll find you a range of properties at below market value – so why wait? Now might be just the right time to start making that investment choice. With the UK house prices continuously on the rise – it could be time for you to make your move.
