house price inflation

Is Inflation Affecting House Price Growth So Far?

The big question of the moment is centred around if soaring house price inflation is wiping out house price growth throughout the nation and, in the monthly market report from the Home website – the truth is that only four English regions (plus Wales) are showing annual growth over and above the RPI inflation figure of 7.7% from November.

Regional Percentage

With RPI inflation heading towards 10%, some regions are seen to be coasting whilst others are victim to significant price falls in real terms. With shrewd buyers fixing seven-year mortgage deals at a low rate of 2%, there are hedges against the growing inflation threat so as not to expect any significant impact on buyers throughout 2022.

Currently, the quantity on the sizable gap between supply and demand has seen agents inventories drop as much as 41% over 12 months – and 50% less than in January of 2019. One of the top four performing English regions is London, where supply has been down 33% year-on-year and sales stock down 25%, but prices are up 1.3% on the last six months alone.

Low Listings

Across the UK, the supply of new sales listings remains comparatively low on a month by month basis. It currently stands down 18% on December 2020 – with London seeing the greater contraction.

The rental market is also seeing a prevalent scarcity and may get even worse, as it currently stands down 24% on January 2021 – which will allow for further rent hikes in due course for 2022.

Undoubtedly, the stamp duty holiday of 2021 fuelled around 1.5m house purchases nationwide, hitting its highest number since before the global financial crisis. Added to this, the huge flexible working changes spurned on by Covid-19 saw many prompted to make a sudden move in relocation – a trend that has not run out of steam yet.

Highest for Mortgages

In 2021, it is estimated that £316bn in home loans were given through mortgages, the highest in 14 years. As house prices reached record levels in 2021, 2022’s housing affordability for first-time buyers will soon start to stretch too wide.

As house price inflation begins to take a stronghold on the economy, people will start to have less income to spend on a mortgage. Currently, the imbalance of supply and demand has been the fuel of rising house prices – with 38% of homes sold for more than the asking price in November of 2021.

For all up to date information on wanting to buy property in Stockport, how to sell a house in the current climate and advice on renting a house, contact the team at Joules Estate Agents Stockport today.