Reports indicate that the average price of a house in the UK is now almost £200,000, more than seven and half times the average UK income. The increase has come despite a slow start to the year in house prices, and costs are expected to rise further still as interest rates remain unchanged until at least the end of 2016.
A Growing Trend: In Figures
In January 2014 the average UK house price was just over £175,000, but just a year later, in January 2015, that cost stood at just over £188,000. Now just 12 months on and prices have risen by a similar amount to just shy of £200,000. This nearly £9,000 increase represents a growth of 4.5% over the 12 month period from January 2015 to January 2016.
The average house price in January 2016 was, in fact, £196,829, a small drop from December 2015, which saw a peak of £196,999. However the seasonal adjustment manipulation slightly alters figures in the quieter month of January to account for seasonal trends in house buying.
The recent growth could be down to a rush of buy-to-let landlords purchasing homes before changes to stamp duty came into effect in April. It could also be attributed to greater lending from banks and the consistently low interest rate from the Bank of England. Analysts also think that increased employment is a contributing factor to higher house prices.
House Prices: The Future
The Bank of England has announced that no interest rate hikes can be expected in the near future, and analysts predict that any rises are unlikely to take effect before the end of 2016 or possibly even mid-2017. Some have gone further, suggesting that interest rates could fall even lower. This, coupled with what is thought to be even more lending from banks over the next few years, should keep prices rising. The rise in house prices, however, means that more and more young people are looking for rental accommodation as they save to buy. Estate agents such as http://www.tgres.co.uk/properties-to-let have a consistently healthy number of houses to rent in Gloucester, whilst agents in the capital are seeing no slow down in people looking for London rental properties.
The average house price of almost £200K is a record high, far beyond the price range of many working Britons.