For the first time since 2007, October 2021 has seen house prices in every single region of the UK rise in unison to record breaking levels as buyer demand surges once more ahead of imminent interest rate increases.
In a month that has seen £5,000, or 1.8%, added to the national average house price, which now sits at £344,445, the North West and Wales saw the strongest growth of 2.3%. Some sources are reporting that these growth rates are even higher, and that the national average increased by £6,000.
A rise in interest rates is expected to happen before Christmas, and when it does, borrowing will become more expensive. This means that the record low mortgage rates that lenders have been offering in recent months will likely come to an end. In other words, it will make buying a home that little bit more expensive.
As such, wannabe buyers are now racing to complete purchases and secure mortgages before interest rates go up. This marks yet another surge of buyer demand that the market simply cannot handle – there are not enough houses to go around. In fact, for every one home currently on the market, there are 13 eager buyers. Unless more homes arrive on the market soon, which doesn’t seem likely, many buyers are going to be left disappointed.
Tim Bannister, Rightmove’s Director of Property Data, said:
“Although more properties are coming to market, the level is still not enough to replenish the stock that’s being snapped up. Consequently, new price records have been set across the board, with every region of Great Britain and all of the three market sectors of first-time buyer, second-stepper and top of the ladder hitting all-time highs.
“This ‘full house’ is an extremely rare event, happening for the first time since March 2007. The stock shortages started after the first lockdown, and they look set to continue with the underlying housing market fundamentals remaining strong, and an additional incentive to buy and fix your mortgage interest rate before a widely expected rate rise.
“Mortgage interest rates are lower than they have ever been before and lenders are keen to lend in a competitive market, with employment and wage growth also robust. The number of sales agreed continue to be strong despite the end of the stamp duty incentives.”