House prices set to rise by another £14,000 before the end of the year
Market analysis from London lettings and estate agent, Benham and Reeves, shows that – despite the wider economic backdrop – house prices could increase by a further 5% before the end of 2022.
The current period of economic difficulty looks set to remain for the duration of 2022 and into 2023. The current cost of living crisis and soaring interest rates are, according to many experts, expected to dampen the housing market boom by reducing buyer demand and, therefore, house prices after two years of extraordinary market activity.
Despite this, existing research predicts that the average house price in the UK is set to keep rising, increasing by 5% by the end of the year. Benham and Reeves estimates that this will add a further £14,320 to the average property value bringing it up to £300,717.
On a regional level, the biggest price increase will be seen in London where a boost of £26,896 will bring the year-end average to £564,816 having started the year at £518,028.
The London borough to see the biggest price increase will be Kensington & Chelsea (£68,103) followed by Westminster (£47,222), the City of London (£41,519), and Camden (£41,493).
Outside London, the South East will finish the year with the biggest increase with a £19,526 boost bringing the average price to £410,039. The increase in the East of England will be £17,724, followed by the South West (£16,116), West Midlands (£12,306), and East Midlands (£12,296).
The smallest end of year price increases are expected to be seen in the North East (£7,896), Northern Ireland (£8,453), and Scotland (£9,612).
Director of Benham and Reeves, Marc von Grundherr, commented: “We keep waiting for house prices to plateau, but it’s just not happening. The pandemic-inspired boom in demand and value has supercharged the housing market to such an extent that it seems even a cost of living crisis and soaring interest rates can’t stop it in its tracks.
So much so that house prices are likely to keep on climbing as the year plays out and in some areas, this will equate to quite a significant increase in property values.
“As for if and when prices will finally fall – it’s hard to predict. But if this coming winter is going to be as tough as most are suggesting it will be, we might find that moving home is pushed to the very bottom of most people’s to-do lists and property values might, therefore, start to decline.”