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.
Indeed, by some measures prices have already dropped, with the Halifax house price index showing a small decrease early in August.
Despite this, research by Benham and Reeves predicts that the average house price in the UK is set to keep rising, increasing by 5% by the end of the year, adding an estimated £14,320 to the average property value.
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 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.”