Is it cheaper to rent a home in the countryside?
Generally, it is cheaper to rent a home in the countryside than in the city. This is because there is less demand for rental properties in rural areas, which means that landlords can charge lower rents. Additionally, the cost of living in rural areas is also lower, which can further offset the cost of rent.
However, the trend of renting in the countryside has been changing in recent years. During the COVID-19 pandemic, many people moved out of cities to the countryside in search of more space and a better quality of life. This increased demand for rental properties in rural areas led to higher rents. However, as the pandemic has subsided, some people have started to move back to the cities. This has led to a decrease in demand for rental properties in rural areas, and rents have started to become more affordable again.
Summer is one of the busiest times of year in the rental market.
And demand for new rentals this year is now even higher than the same time last year.
Meanwhile, the supply of homes to rent is only slightly ahead of last year’s levels.
That means the supply-demand gap for the rental market is continuing to put pressure on rents.
And as demand increases, so do the prices.
Our rental index of new lets shows that the average UK rent increased by 0.9% over June - the highest monthly increase since October 2022.
The average UK rent has now reached £1,163, which is £110 higher than a year ago.
Rents in urban areas rise faster than rural areas
A new trend is emerging in the rental market: rural areas are becoming more affordable than cities when it comes to new lets.
Rural areas are built out of Census output areas defined as those with a population of less than 10,000. They can include isolated dwellings, hamlets, villages and small hub towns.
Urban areas are built out of Census output areas that tend to have a population of 10,000 or more and include cities, towns and suburbs.
In England, the average city rent in major cities reached £1,300 in June, while in the countryside it remained £220 lower at £1,080.
The lettings market in UK cities is prone to seasonal summer spikes in rental inflation as demand from students, graduates and relocating families grows over the summer.
In recent months, some of the largest UK cities have experienced above national average inflation of more than 10%.
However, rural rents are now growing at a slower pace.
Over the last 12 months, rents in the English countryside increased by an average of 6.6% or £67 a year.
This new trend marks a reversal of what happened during the pandemic years of 2020-21, when rural rental properties were in hot demand.
The reopening of cities in 2021 has seen renters returning to urban areas. And by June 2022, their regained popularity led rental inflation in cities to exceed that of their rural counterparts.
Rental affordability in cities has become increasingly challenging.
Conversely, the average proportion of household earnings needed to rent in the countryside has stayed broadly the same over the last 12 months.
Having said that, this won’t be a universal experience of all renters in rural locations.
Some 2 out of 5 rural areas saw rental inflation rise above the national average wage growth (6.9%).
And renters in some rural areas are now having to put a higher proportion of their income towards housing costs.
8 UK cities where rents are rising fastest
| City | Average rent | % increase | annual increase pcm |
|---|---|---|---|
| Edinburgh | £1,136 | 14.2% | £140 |
| London | £2,005 | 13% | £230 |
| Manchester | £983 | 13% | £110 |
| Glasgow | £871 | 12.9% | £100 |
| Southampton | £1,052 | 10.9% | £100 |
| Cardiff | £1,031 | 10.9% | £100 |
| Birmingham | £865 | 10.2% | £80 |
| Nottingham | £899 | 10.1% | £80 |
Rental Market Index
In June, we identified 8 major UK cities where the prices of new rents increased by at least 10% in one year.
In Edinburgh, London, Manchester, Glasgow, Southampton and Cardiff, the cost of a new let rose by £80 pcm or more.
Top of the list was Edinburgh, where the average monthly rent for a new let in the city rose by £150 pcm, pushing the average rent close to £1,200 per month.
Manchester and Glasgow were next, with rents increasing by £120 and £100 pcm respectively.
Meanwhile, renters in Liverpool, Sheffield and Belfast saw the lowest rental growth among the largest UK cities.
In these locations, average monthly rents increased by less than £60 in the last year.
Cheaper urban areas to rent
While most renters across the UK saw steep rental increases in the last 12 months, there are a few exceptions.
When considering the UK’s largest urban areas, there are three towns where rental inflation was below 5%.
Annual rental increases in Blackpool were the lowest among all UK cities and large towns, with average rents increasing by £20 on average.
Blackpool is followed by Doncaster and Grimsby, both in Yorkshire and the Humber, where rent increases over the last 12 months were £30 and £20 respectively.
All three areas are among the least expensive large towns to rent in the UK.
|
Town |
Average Rent (PCM) |
Annual rental price change (%) |
Annual rental price change (£) |
|
Grimsby |
£579 |
4.7% |
£30 |
|
Doncaster |
£644 |
3.8% |
£20 |
|
Blackpool |
£651 |
3.2% |
£20 |
Rents rise fastest in London and Scotland
Scotland and London - the two largest rental markets in the UK - are experiencing the steepest growth.
In Scotland, rents increased by £80 per calendar month (or 13.1%) on average in the last 12 months.
In the Scottish Borders area of Tweeddale, the monthly cost of a new let increased by 17.1% - or £80 pcm.
In London, rents have risen £230 (or 12.7%) in the last year. That’s actually down from an annual rise of £273 (or 17.6%) in the 12 months leading up to June 2022.
The fact that rental inflation is coming down in the capital now suggests affordability is stretched in London, with less headroom for rents to grow further.
In reality, there is a lot of variation in how fast rents are going up in different London boroughs.
For the fifth month in a row, rents in Newham are growing faster than anywhere else in the capital (16.5%), whereas the lowest rental inflation is currently being seen in Kensington and Chelsea (11.0%).
Slower rental growth in Northern Ireland and South West England
Our data shows the lowest rental inflation is happening in Northern Ireland (4.3%) and the South West (7.7%).
Northern Ireland is currently among the regions with the lowest earnings growth in the UK, which limits how much rents can increase.
Meanwhile, demand for rentals in the South West has slowed down from the pandemic peak of 2021 and it has been lagging behind other UK regions since October 2022.
This has eased the pressure on rental inflation in the region, particularly in the more rural areas.
Key takeaways
- Rents in cities are now rising faster than in rural areas
- In 8 UK cities, rents have increased by more than 10%. In Edinburgh, rents are up 14%
- However in rural locations, rents have increased by 6.6% - or £67 on average
- The average monthly UK rent reached £1,163 in June, which is £110 higher than a year ago, with London and Scotland seeing the greatest increases
Things to do in London in August 2023
It’s the height of summer, but the weather is anything but balmy. Raincoats and jumpers are the order of the day, but that doesn’t mean we can’t have a good time in London this weekend. The city is always buzzing with energy, no matter what the weather, and there are plenty of things to do to keep you entertained.
1. Dance in the W11 streets at Notting Hill Carnival
Dancing, music and masquerade – make the most of the Notting Hill Carnival with our full guide to all the info, dates, timings details and tips.
For a lot of Londoners, Notting Hill Carnival on the August Bank Holiday Weekend flashes by in a blaze of feathers, Red Stripe and tinnitus. To those who make it happen, it’s a year-round operation to create one of the biggest and oldest street parties in the world. This Carnival weekend, it’s expected that more than two million people will flock to west London to dance in the streets of W11. It’s free to join family day on the Sunday and the Monday which is for the hard partiers. It’s a celebration of freedom and Caribbean culture, with an iconic parade showcasing the best of mas, soca, calypso, steel bands and soundsystems. What are you waiting for?
When is Notting Hill Carnival 2023?
West London is getting taken over again with dazzling floats, kaleidoscopically dressed performers, rib-shaking soundsystems, the sweet, smoky smell of jerk chicken and steel bands over the August Bank Holiday weekend from Sunday August 27 to Monday August 28.
When is family day for Notting Hill Carnival?
Family day is on Carnival Sunday August 27 2023. The official opening ceremony will take place from 10am to 10.30am on Great Western road, before the children’s day parade and Carnival Parade kicks off and runs until 5pm.
Which is the better day at Carnival?
If you’re after a more chilled NHC experience, go for family day on Sunday, or if you like the sound of a hard-partying parade, make sure to go on Carnival Monday. The festivities kick off with an opening ceremony on Sunday morning, with the parade starting at 10am. Monday’s adult’s day parade starts at 10.30am and afterparties run until after dark. There’s nothing stopping you from going both days, of course.
Do I need a ticket for Notting Hill Carnival?
The NHC parade is free for anyone to attend and everyone is welcome. But, if you want to join in with the parade, you need to be part of a group authorised to do so, or pay to join the procession. If you want to continue the festivities into the night, you will need to buy a ticket for one of the countless afterparties across the city.
Travel by tube:
As Notting Hill’s roads will be closed off throughout the Bank Holiday weekend, you won’t be able to get an Uber or catch a bus into the heart of the action. But there are plenty of nearby tube stations are within walking distance of the main event including Notting Hill Gate, which will be ‘exit only’ from 11am to 7pm each day, to accommodate the hundreds of thousands of people using the station that day. FYI: there will be no interchange between the Circle and District line and Central Line on both days.
Royal Oak and Westbourne Park will be ‘exit only’ from 11am to 6pm, with Royal Oak closing thereafter and Westbourne Park closing after 11.30pm. Also don’t forget: Latimer road will be closed from 11.30pm on both days. Avoid Ladbroke Grove and Holland Park as they’re both closed on Sunday and Monday.
Want a Carnival hack? Don’t forget to pick a meeting point in advance for when you inevitably lose your mates in the crowd.
2. Glowing animatronic swans will fill the Thames at this year’s Greenwich + Docklands Festival
London’s spectacular free outdoor Greenwich + Docklands International Festival is back for 2023. The free line-up once again features the sort of spectacular installations that have become its hallmark since the pandemic moved the focus away from street theatre. Look out for ‘Cygnus’ by Denis Bivour and Florian Giefer, which will see illuminated animatronic swans fill the Thames at the Royal Docks (Aug 31-Sep 3), the festival opener ‘Open Lines’ (Aug 25) and the return of GDIF regulars Greenwich Fair (a big Greenwich-wide family fun day on Aug 26).
3. Dance to Stormzy, The Strokes, Yeah Yeah Yeahs, HAIM, Erykah Badu and more at All Points East
Since its inception in 2018, All Points East has earned a reputation for a varied blend of musical styles and genres. Back in Vicky Park for another instalment, it’s confirmed big-hitting headliners Stormzy, HAIM, The Strokes, Jungle and Dermot Kennedy. The support acts are just as enticing, with the likes of Erykah Badu, Amyl and the Sniffers, Confidence Man, Angel Olsen, Tove Lo and more warming up the stage. This all comes bookended with free activities around the local area from In The NBHD.
Line-up: Stormzy, The Strokes, Yeah Yeah Yeahs, HAIM, Erykah Badu, Dermot Kennedy, Jungle.
This year’s headliners are Stormzy (August 18), Field Day (August 19), The Strokes (August 25), Jungle (August 26), Dermot Kennedy (August 27) and Haim (August 28).
The rest of the line-up features a huge range of artists, from the Yeah Yeah Yeahs and Erykah Badu to Angel Olsen, Confidence Man, Sampha and Kehlani.
How to get tickets
You can get tickets for each day on the official website here.
Ticket prices differ depending on the tier and entry time you choose. Some dates still have primary entry available, and ticket prices can start from £57.05. However, it looks like it’s selling out, so be sure to book now to avoid disappointment.
4. Tuck into six-course tasting menu inspired by fantastical tales at Six by Nico
Get a nostalgic captivating dining experience, inspired by fantastical tales
Word about Six by Nico has spread across the country thanks to its novel concept: its ever-evolving six-course tasting menu changes every six weeks each time with a different theme inviting you on a journey of discovery to experience new flavours. Whether you are a food novice or connoisseur, enjoy a carefully curated experience with everything from an amuse-bouche to an indulging dessert. Right now you can tuck into the ‘Once Upon A Time: Chapter II’ menu inspired by fantastical tales.
Highlights
- A carefully curated six-course tasting menu inspired by nostalgic memories
- Offer also includes a glass of Prosecco
- Vegetarian menu also available
- Over 30% off
Time Out says
Famed for its ever-evolving restaurant concept, where the menu changes every six weeks, Six By Nico invites you on a journey of discovery to experience new flavours. Whether you are a food novice or connoisseur, enjoy a carefully curated experience with a six-course tasting menu with everything from an amuse bouche that pleases the palate to an indulging dessert. Enjoy the ‘Once Upon A Time: Chapter II’ menu, a captivating dining experience, inspired by fantastical tales that are sure to delight with every bite.
What’s on the menu?
Once Upon A Time: Chapter II
Course One
Bird Pie – The Twits; Chicken & Duck Leg Ragu, Pickled Celeriac, Prune & Caramelised Puff Pastry
Course Two
Just Right Porridge – Goldilocks; Spaetzle, Barbecue Maitake, White Turnip, Black Garlic Dressing
Course Three
I Like Them, Sam-I-Am! – Dr. Seuss; Smoked Ham Hough Sandwich, Garden Pea Pesto, Egg Yolk Jam
Course Four
Dip Face, Have A Carrot – Matilda; Sole Ballotine, Tandoori Baked Carrot, Carrot Top Pesto, Lobster Jus
Course Five
I’ll Huff, And I’ll Puff! – Three Little Pigs; Pork Roulade, Pumpkin, Sweet & Sour Choucroute, Smoked Ash Emulsion, Bourguignon Jus
Course Six
Brucey! Brucey! – Matilda; 54% Chocolate Cremeux, Miso Caramel, Mango & Passion Fruit
Need to know
- This voucher is valid for six courses and a glass of Prosecco at Six By Nico.
- To redeem, please book here, with your preferred date and time. Please include your voucher, and security code in the comments section.
- The Once Upon A Time: Chapter II menu will be available to book during the valid dates of this voucher. Please visit Six by Nico to view all menu options at both Fitzrovia and Canary Wharf locations.
- The six-course tasting menu is priced at £48 per person with the option to enjoy an expertly selected wine. Specialist drinks pairing for an additional £35 at each restaurant.
- All Six by Nico menus can cater to dietary requirements and can be made vegan upon request and if enough notice is given to our team of chefs.
- Voucher valid until September 24, 2023.
- Please present your voucher upon arrival.
- Offer not valid on Saturdays.
- Maximum booking of six people.
- One voucher per person.
- Menu subject to change.
- The restaurant must be informed of any changes/cancellations – if the booking is cancelled within 24 hours of your booking, the voucher will be deemed to have been redeemed for the current booking and cannot be used towards a new booking.
- Location(s): Six by Nico Fitzrovia, 41 Charlotte Street, London W1T 1RR and Six by Nico Canary Wharf, Chancellor Passage, London E14 5EA.
- This voucher cannot be cancelled, amended, exchanged, refunded or used in conjunction with any other offer. For full terms and conditions.
What do higher interest rates mean for the housing market?
The UK base rate continues to increase but mortgage rates are close to peaking.
Base rate up 0.25% - fewer increases expected
The Bank of England has raised rates again to 5.25% in an effort to cool inflation. City expectations of how much higher interest rates need to rise have moderated in recent weeks. Most expect only one more increase. This is an improvement on a few weeks ago when market expectations were for base rates to rise above 6%.
Mortgage rates for fixed rate deals are close to peaking
Changing market expectations for base rates has led to a fall in the underlying cost of finance for fixed rate mortgages. Some banks have already started to reduce mortgage rates as a result. These are modest reductions so far, but a sign mortgage rates are peaking.
We expect mortgage rates to fall further in the months ahead but how much depends on the outlook for inflation and what this means for City expectations for base rates. We could well see sub 5% mortgage rates return this autumn.
9 in 10 mortgage holders on fixed rates
The vast majority of people buying homes in recent years have taken mortgages with fixed rates. Almost 9 in 10 outstanding mortgages (87%) are on fixed rates meaning today’s rate rise will not have an impact on their monthly repayments.
However, 15% of mortgage holders will see their fixed deal come to an end in 2023, meaning the need to refinance onto higher rates and pay an extra £200-£250 per month on average. In some areas with higher property prices this increase will be much greater.
The remaining 13% of mortgagees are on variable rates which means higher mortgage repayments almost straight away. The fact over 1 in 10 loans are on variable rates probably reflects those with smaller loans where changes in rates have a much smaller impact on their monthly repayments.
Jump in borrowers paying down mortgages
Households with access to savings are paying down mortgage debt at a much faster rate as they look to reduce the impact of higher rates. This trend is being exacerbated by lower savings rates which makes paying down debt more attractive, especially for those who are higher rate taxpayers.
Bank of England data shows households paying off an extra £2.2 billion a month over and above regular debt repayments - this is 66% higher than the 10 year average.
Higher mortgage rates have a variable market impact
The rise in mortgage rates has hit demand from new buyers by 18% over the last 2 months. Sales have also slowed but Zoopla has not seen a drop in activity as severe as over the period immediately after 2022’s mini budget.
Home buyers are steadily accepting that we are returning to a period of more normal mortgage rates in the 4-5% range rather than the ultra low, sub 2% mortgage rates of recent years.
Higher mortgage rates hit buyers hardest in higher value housing markets where the size of the mortgage is larger and buyers need a larger income to buy. House Price Index shows prices falling across southern England as the hit to buying power pushes prices lower.
However, in the north of England and Scotland house prices are still rising as the impact of higher mortgage rates is less pronounced. These trends are explained by the income needed to buy and how accessible the market is for first-time buyers.
It’s cheaper to buy than rent at 5.5% mortgage rates across lower value housing markets in the north of England and Scotland. In contrast, in southern England, would-be first-time buyers face much greater challenges which weakens demand and keeps house prices under downward pressure.
UK house prices to fall 5% over 2023
Higher mortgage rates have reduced the buying power of households and this will need to be reflected in house prices which fell at the end of 2022 but started to increase this spring as mortgage rates reduced to 4%.
Now mortgage rates are rising again we expect further modest price falls in the second half of 2023. Overall we expect the average UK house price to fall 5% over 2023 but they will still remain 15% higher than the start of the pandemic.
The longer term outlook depends on the strength of the economy and labour market and how long mortgage rates remain over 5%. We expect house price growth to remain very low over 2024 and into 2025 as the market adjusts to higher borrowing costs.
There is no quick rebound in prospect as mortgage rates start to fall and anyone serious about moving needs to set their price carefully if they want to move home.
Key takeaways
- The Bank of England base rate has risen but the underlying cost of a fixed rate mortgage has been falling in recent weeks
- Mortgage rates are close to peaking
- 15% of households with a mortgage will need to refinance this year
- The impact of higher mortgage rates on demand and house prices is not uniform across the country
Are You Paying Too Much for Your London Mortgage?
27% of homeowners with a mortgage are on their lender’s standard variable rate. Could you be one of them?
When your mortgage deal period ends, you’ll normally move onto your lender’s standard variable rate.
A standard variable rate (or SVR) is usually a lot higher than your existing rate. Currently the average is around 7.5%, and it can change at any time your lender decides.
Some lenders move you onto a ‘follow on’ rate instead, which can be even higher than their standard variable rate.
According to recent research by mortgage broker Habito, one in 10 mortgagees believe that paying a more expensive rate on their mortgage meant they’d be paying off their mortgage quicker.
It doesn’t. It simply means you’re paying the lender more interest instead.
Your lender will be able to tell you in advance what your monthly payment will be once your current deal ends.
How much more expensive is a lender’s standard variable rate?
An SVR or ‘follow on’ rate can be between 2% and 3% higher than the average five-year or two-year fixed rate mortgage.
And the lender can raise the rate at any time.
When the Bank of England increases the Base Rate (which has currently risen 13 times since December 2021) SVR and tracker rate mortgages may increase too, as they usually follow the Base Rate.
However there are exceptions. And some lenders have opted not to increase the rate on their SVR mortgages when the Base Rate has risen.
Your lender will always let you know what’s happening with your mortgage rate.
Current SVRs and fixed rate deals from major lenders
Let’s take a look at the standard variable rate and fixed rate mortgage deals currently being offered by some of the major lenders.
|
Lender |
SVR |
10-year fixed |
5-year fixed |
2-year fixed |
|
Barclays |
7.99% |
5.15% |
5.32% |
5.9% |
|
Halifax / Lloyds |
8.49% |
5.33% |
5.83% |
5.23% |
|
HSBC |
6.99% |
- |
5.61% |
6.14% |
|
Nationwide |
7.99% |
5.04% |
5.59% |
6.09% |
|
Santander |
7.75% |
- |
5.84% |
5.44% |
|
The Mortgage Works (buy to let) |
8.49% |
5.49% |
5.74% |
6.19% |
|
Virgin Money |
8.74% |
5.18% |
5.63% |
6.13% |
|
Yorkshire BS |
7.99% |
5.72% |
5.6% |
5.34% |
If you had a £200,000 mortgage spread over 25 years on a £250,000 property, you could end up paying several hundred of pounds more in interest each month on the lender’s SVR.
To cite Virgin Money’s rates above as an example:
On the standard variable rate of 8.74%, you’d be paying £1,642 a month.
At the two-year fixed rate of 6.13%, you’d be paying £1,304 a month.
With the five-year fixed rate of 5.63%, you’d be paying £1,243 a month.
And with the 10-year fixed rate of 5.18%, you’d be paying £1,190 a month.
That’s a potential difference of £452 a month, or £5,424 a year, between a lender’s standard variable rate mortgage and fixed rate deal.
Use our mortgage calculator to work out what your monthly payments could be.
Why are so many people on standard variable rate mortgages?
Habito’s research suggests many homeowners are slipping onto their lender’s SVR without even realising it or knowing that they have an alternative.
But it’s always worth contacting a broker 3-6 months before your current mortgage deal is due to end.
You can book in a new deal up to six months in advance.
And if a better rate comes up between the time you booked the deal and the time it’s due to begin, you can simply book in that rate instead.
Your mortgage broker will be the best person to advise you on what to do.
Trusted partner is Mojo Mortgages, a free online mortgage broker.
Financial concerns
One in 10 homeowners were frightened of lenders scrutinising their finances, given the current economic climate.
This is where a broker can help. They have an in-depth knowledge of the mortgage market and know the rules that different lenders operate by.
Once your broker has an understanding of your financial circumstances, they’ll know which lenders to approach on your behalf.
Unaware of mortgage alternatives
One in 10 didn’t realise it could be possible to get a cheaper mortgage deal.
A mortgage broker will scour the market for you to find the cheapest mortgage rates available to you.
Too much hassle to switch mortgages
In a recent survey by Which?, 41% of homeowners on an SVR mortgage said they’d be unlikely to switch to a cheaper deal.
They felt it ‘wasn’t worth the hassle’ or they ‘hadn’t really thought about it’.
This in part may be because homeowners with smaller mortgages are less likely to feel the financial hit when moving onto an SVR.
But when the savings can run into hundreds of pounds a month, it’s a call to a broker that’s worth making.
Fears of being in negative equity
Other homeowners were concerned that they might be in negative equity.
Negative equity is when a property you own is worth less than the mortgage you're paying on it.
What is negative equity?
Most lenders won't let people with negative equity switch to a new mortgage deal when their existing one ends. Instead, they'll normally be moved onto their standard variable rate.
You can find out if you’re in negative equity by checking the balance left on your mortgage and inviting estate agents round to value your home.
If you are in negative equity, it could still be worth speaking with a mortgage broker, as they may be able to find a lender that could help.
Mortgage rates are set to come down this autumn
In good news for homeowners and buyers, mortgage rates look set to hit their peak this summer.
Inflation is now on its way down and so are swap rates - the rates the banks pay to borrow money.
Swap rates are based on what the markets think the interest rate will be in the future.
Right now, the average mortgage rate for a 5-year fixed rate at 75% loan to value has reached 5.4%, compared to 4% in the Spring.
The reduction in swap rates will take time to feed through into mortgage rates, but our Executive Director - Research, Richard Donnell, believes they could fall below 5% this autumn.
Whether you need to remortgage now or in six months time, if your current mortgage deal is coming to an end soon, it’s well worth contacting a mortgage broker.
They will be fully up to speed on the latest mortgage market trends and current rates available.
And they are in the best place to advise you on getting the cheapest possible mortgage deal for you.
Which Properties Are Selling Best in London Right Now?
The UK property market is currently in a state of flux, with rising mortgage rates and a cost-of-living crisis putting pressure on buyers. However, there are still some properties that are selling well, especially in London.
Family-sized homes are still in demand, but buyers are looking for bargains.
In the past, 3- and 4-bedroom family homes were the most popular type of property in London. However, rising mortgage rates have made these homes more expensive, and buyers are now looking for good deals.
Flats are also selling well, especially in central London.
Flats are often seen as a more affordable option than houses, and they are also becoming more popular with investors. In central London, flats are selling at a premium, and there is a shortage of supply.
What does this mean for sellers?
If you are selling a family-sized home in London, you may need to be prepared to negotiate on price. However, if you are selling a flat, you may be able to get a good price, especially if it is in a desirable location.
Here are some tips for sellers in London:
- Get your property valued by a professional.
- Price your property competitively.
- Make sure your property is in good condition.
- Market your property widely.
The London property market is always changing, so it is important to stay up-to-date on the latest trends. If you are thinking of selling your property, it is a good idea to speak to a property expert to get advice on the current market conditions.
Here are some additional details about the UK property market:
- The average house price in the UK is currently £280,000.
- The average house price in London is currently £525,000.
- The number of house sales in the UK fell by 12% in July 2022.
- The number of house sales in London fell by 10% in July 2022.
Key takeaways
- Demand falls as higher mortgage rates prompt buyers to reassess what they can afford
- Family-sized homes are hardest hit as buyers have less money to spend on larger properties
- Flats make a comeback, gaining popularity as buyers look for more affordable options
Will mortgage rates go down in autumn 2023?
Mortgage rates are expected to peak this summer, as inflation begins to fall and swap rates - the rates banks pay to borrow money - also decline.
The last six weeks have seen mortgage rates rise quickly towards 6%, impacting both buyers and sellers in the housing market. Some buyers, cautious about taking on higher rate mortgages, have stepped back and demand has fallen by 18% in the last two months. This marks a turnaround from the first half of the year, when rates were edging towards 4% and sales increased.
What happens in the housing market for the rest of 2023 all hinges on what happens with mortgage rates. Our Executive Director - Research, Richard Donnell, says: 'Higher mortgage rates have hit home buyer demand, but the impact is not uniform across the country. Southern England is set to experience above average price falls, while some areas may not post any.'
When will mortgage rates go down?
Inflation is now coming down and is currently running at 7.9%, compared with the recent high of 11.1% in October 2022. The Bank of England has stated that it expects it to fall significantly further this year because:
- Wholesale energy prices have fallen significantly
- The price of imported goods is falling as production difficulties ease
- Reduced spending power means less demand for goods and services in the UK
That means it now looks less likely that the Bank of England will need to raise rates as much as financial markets expected just a few weeks ago.
We believe mortgage rates are likely to peak this summer, because swap rates - the rates banks pay to borrow money - have fallen by 0.6% over the last 3 weeks. Swap rates are based on what the markets think the interest rate will be in the future.
Right now, the average mortgage rate for a 5-year fixed rate at 75% loan to value has reached 5.4%, compared to 4% in the Spring. The reduction in swap rates will take time to feed through into mortgage rates, but they could fall below 5% this autumn. That said, there is a risk that mortgage rates may remain higher for longer as the Bank of England works to get inflation back down to 2%.
What does all this mean for house prices?
Higher mortgage rates are having a detrimental effect on house prices, particularly in the south of England where homes are more expensive. However, the decline in buyer demand is not as marked as that seen in the wake of the mini budget. Overall, it's running at 6% below 2019 levels. When looking at the picture year on year, demand is 40% lower than it was this time last year. That said, the number of actual sales being agreed is only 17% lower, as buyers and sellers currently in the market remain committed to moving home.
Southern England, where the average house price is over £300,000, is being hit hardest in terms of prices. House prices here are falling by up to 0.6% year-on-year. However in the Midlands, Northern England, Wales and Scotland, where properties are cheaper, the picture is brighter and homes are registering growth of over 1% year-on-year. In Scotland, homes are up 2%.
On average across the UK, house price inflation is currently running at just 0.6%, whereas this time last year it was running at 9.6%.
First-time buyers are also feeling the strain of higher mortgage rates, weakening demand at the bottom end of the housing ladder.
'Weaker buyer demand will push down prices over H2 2023,' says Donnell. 'We expect modest price falls over the coming months, with UK house prices expected to fall by up to 5% over 2023. This would mean that prices are still 15% higher than at the start of the pandemic. Even if mortgage rates fall back into the 4-5% window later this year and into 2024 H1, we expect house price growth to remain very low for the next 1-2 years.'
Key takeaways
- Mortgage rates are set to peak this summer and look likely to return to 4-5% this autumn
- However, there is a risk that rates may stay higher for longer
- Higher mortgage rates have hit buying power in the south of England hardest
The 25 locations where homes sell the fastest in July 2023
We track the speed of property sales in the UK. We can tell you where homes are selling the fastest in July 2023.
We track the speed of property sales in the UK - the time it takes from a property being listed for sale to being sold subject to contract.
Our latest analysis into how long it takes to sell a house shows that UK homes are selling in 30 days on average.
But some homeowners could expect to sell in just 21 days, depending on where you live.
With all this data to hand, we can estimate how long it’d take to sell your house. Just track your home and head to your local market stats.
Time to sell a UK home matches the 5-year average
The current average sell time of 30 days is in line with the 5-year average and one day slower than in January 2023.
The amount of time a property spends on the market is a very seasonal measure. Generally, you’ll sell more quickly in the first half of the year than the second half.
However, the current time to sell is 10 days slower than this time last year, when more people were moving after the pandemic.
Higher mortgage rates, cost-of-living pressures and lower consumer confidence have hit buyer demand, which is translating into slower sales across much of the country.
The 25 fastest locations to sell a home in the UK
With value for money now playing a much bigger role in the housing market, there’s been a great deal of change to our list in the last year.
Only 8 of last year’s fastest housing markets are still in the top 25. Demand has dropped in locations that saw fast sales - and subsequently strong price growth - in 2022.
| Local authority area | Region | Average time to sell a home (days) | 5-year average time to sell a home (days) |
|---|---|---|---|
| Eden | North West | 21 | 32 |
| Newcastle upon Tyne | North East | 21 | 28 |
| Bristol | South West | 22 | 23 |
| Carlisle | North West | 22 | 28 |
| Knowsley | North West | 22 | 24 |
| Waltham Forest | London | 22 | 22 |
| Cardiff | Wales | 23 | 25 |
| North Tyneside | North East | 23 | 30 |
| Sheffield | Yorkshire and The Humber | 23 | 25 |
| Stoke-on-Trent | West Midlands | 23 | 24 |
| Gateshead | North East | 24 | 30 |
| Halton | North West | 24 | 27 |
| Newcastle-under-Lyme | West Midlands | 24 | 25 |
| Plymouth | South West | 24 | 26 |
| South Gloucestershire | South West | 24 | 25 |
| Woking | South East | 24 | 23 |
| Allerdale | North West | 25 | 32 |
| Bexley | London | 25 | 28 |
| Birmingham | West Midlands | 25 | 25 |
| Cambridge | East of England | 25 | 30 |
| Colchester | East of England | 25 | 27 |
| Copeland | North West | 25 | 32 |
| Methyr Tydfil | Wales | 25 | 31 |
| North East Derbyshire | East Midlands | 25 | 27 |
| Salford | North West | 25 | 22 |
rolling median time to sell, April to June 2023
Sale times slow where house prices rose sharply in 2022
Fast-moving housing markets tend to see above-average house price growth, as buyers compete for fewer houses.
But now mortgage rates are higher, many of last year’s fastest markets have slowed down. Buyers are increasingly unable to afford those places where homes sold the fastest and prices rose the most.
Southern locations are particularly affected due to the higher average house prices. Dartford, Exeter, Luton and Ipswich have all fallen off the list since last July.
The Midlands is seeing the same trend with homes selling more slowly in Rugby, Worcester, Coventry and Redditch.
And it’s a similar story in the North West, with buyers now turning away from the areas they were after last year, like central Manchester, Bury, Wigan and Chorley.
Properties selling fastest in new affordable locations
Different areas have risen to the top of our fastest-markets list as buyers find more value in new locations.
In the North West, buyers are moving the fastest in parts of Cumbria, with Eden, Carlisle, Allerdale and Copeland all appearing on our list for the first time.
Three parts of Newcastle make the list this year when nowhere in the North East featured a year ago. Homes in the city centre, North Tyneside and Gateshead are selling in 21, 23 and 24 days respectively.
In the West Midlands, homeowners are selling the quickest in Stoke-on-Trent, Birmingham and Newcastle-under-Lyme.
Cardiff and Merthyr Tydfil have sale times of 23 and 25 days, replacing last year’s Welsh entries of Neath Port Talbot and Bridgend.
Bexley and Waltham Forest - both in East London - offer relative affordability for Londoners, while the commutability of Woking, Basingstoke, Colchester and Cambridge is likely contributing to their fast sale times.
East Midlands and East of England see biggest slowdown in time to sell
When we look at regional trends, the East Midlands and the East of England have seen the biggest slowdown in time to sell. Homes now take 4 and 3 more days to sell respectively than they usually would have over the last 5 years.
Meanwhile, the North East, West Midlands and South West are the only 3 regions where homes are selling more quickly than the UK average.
It takes 27 days to sell a property in the North East - 5 days quicker than its 5-year average of 32 days.
Homes in the West Midlands have a 28-day sell time. This is a little slow for this region, as its average sell time over the last 5 years was 27 days.
The South West comes in at 29 days - quicker than the UK average, but a day slower than you’d expect in the region over the last 5 years.
At the bottom end of the table, homes in London and the South East are selling the slowest. It takes 35 and 34 days on average, although these are both only one day slower than their 5-year averages.
| Region | Average time to sell a home (days) | 5-year average time to sell a home (days) |
|---|---|---|
| North East | 27 | 32 |
| West Midlands | 28 | 27 |
| South West | 29 | 28 |
| North West | 30 | 29 |
| Wales | 30 | 31 |
| Yorkshire and the Humber | 30 | 28 |
| East Midlands | 34 | 30 |
| South East | 34 | 33 |
| East of England | 35 | 32 |
| London | 35 | 34 |
rolling median time to sell, April to June 2023
How long does it take to sell a house after you’ve agreed an offer?
Our data only looks at the time it takes between a property being listed for sale and being sold subject to contract.
After that, there’s still a lot that needs to happen before you can move.
The conveyancing and mortgage application process usually takes between 3 and 4 weeks, but it might be longer - especially if you’re in a chain.
Then you’ll exchange contracts, which is when you and the buyer are both legally locked into the sale.
The day you’re really waiting for is completion day, when you hand over the keys. This usually happens 1 to 3 weeks after exchange. But like a lot of things in the home moving process, it can be quicker or slower than that.
Key takeaways
- The average time to achieve a sale in the UK is 30 days, which was also the average speed over the last 5 years
- A year ago, UK homes were selling in an average of 19 days due to greater competition among buyers
- Only 8 of last year’s fastest areas remain in this year’s top 25 locations as buyers seek value for money in different places
- The major cities where properties sell the fastest are Newcastle, Bristol and Cardiff
- The North East of England is the fastest moving region in the country with homes selling in 27 days on average
The Best Upcoming Events in London in July 2023
The Best of London in July 2023: Your Ultimate Guide to Events and Things to Do.
July is a great time to be in London. The weather is warm and sunny, the city's parks are lush and green, and there are plenty of exciting events happening.
1. The BBC Proms is back with a whole load of classical treats
☆ Music, ☆ South Kensington, ☆
Another year, another spectacular line-up of classical music, kicking off with a series of Nordic music and a world premiere from Ukrainian composer, Bohdana Frolyak on July 14, and waving us off in the traditional flurry of Union Jacks and bow ties on September 9. In 2023 the BBC Proms will be treating us to a huge range of programming featuring composers and orchestras from Berlioz to Bollywood, large scale symphonic and choral work, as well as intimate chamber concerts and exciting debuts. Look out for big classical hitters like Sir Stephen Hough, Sir Simon Rattle and Chineke! orchestra as well as more off-the-wall editions like orchestral collaborations with non-classical artists, including Rufus Wainwright, Self Esteem and Jon Hopkins, the first Bollywood Prom, Northern Soul Prom and the first concert featuring fado with Portuguese singer Mariza. For little ones, the Horrible Histories present ‘Orrible Opera, while unusual experiences for young and old include a late night Moon and Stars Prom and the Fantasy, Myths and Legends Prom featuring music from film, TV and gaming. Booking ahead is recommended.
2. Head to London Zoo after dark" with "Embark on a unique adults-only adventure
☆ Zoo Nights are back for 2023!
A reincarnation of Zoo Lates (which ended in 2015), Zoo Nights brings ‘after hours’ fun to ZSL London Zoo. Explore the zoo without crowds or kids in the way (this is an adults only experience), hear the Birds and The Bees guided tour where expert guides reveal what animals get up to after dark, play animal-themed games, graze on delicious international street food (there’s plenty for herbivores and carnivores alike) or grab a drink at one of the bars. Time to unpack that elephant onsie?
Highlights
- See the zoo without the kids or the crowds!
- Animal-themed games
- Street food and bars also available
- Get tickets now for just £19.50
When and where?
Fridays, June 9 until July 28 from 6 pm at London Zoo
Need to know
- This is valid for a ticket to Zoo Nights at London Zoo.
- This event is restricted to those aged 18 and over.
- This booking is only valid for your selected date/time option.
- Arrival from 6 pm, last entry at 9 pm, event ends at 10 pm.
- Please note the majority of the animal exhibits will close at 9 pm, with some exceptions closing at 9.30 pm.
- *Additional charges apply for the Birds and The Bees guided tour.
- Please present your booking confirmation upon arrival.
- Location: Outer Circle, Regent’s Park, London NW1 4RY.
- This ticket cannot be cancelled, amended, exchanged, refunded or used in conjunction with any other offer.
3. Immerse yourself in the excitement of Wimbledon on a giant screen
☆ Things to do
Missed out on tickets in the Wimbledon Tennis Championships ballot? Can’t face camping out on the street for day tickets? No problem. London is a city that gives back and this summer it will be peppered with big screens showing all the Murray Mound (okay, Henman Hill) action in so much blown-up high-res glory that you might as well be court-side.
This year the tournament (which started in 1877!) runs from Monday 3rd July 2023 to Sunday 16th July 2023 and you’ll catch screens across the capital showing most matches on each day of the event, so there are plenty of opportunities to spend an afternoon or evening in a sweet viewing spot.
There will be more big screens announced nearer the time, many of which will also have extras such as special edition cocktails, food offers and even pop-up tennis coaching. Take that Centre Court.
4. Ballie Ballerson: The ultimate adult playground for kidults
Highlights
- Ticket includes all-night entry, two-hour ball pit session and a cocktail
- Ball pits, dance floor & more
- Just £6!
Need to know
- This voucher is valid for a two-hour ball pit session, all-night bar entry and 1 signature cocktail at Ballie Ballerson.
- Availability: Sunday, Tuesday, Wednesday and Thursday from 6 pm until close.
- Please present your Time Out booking confirmation to the door team upon arrival to claim your cocktail.
- To book your ball pit session, select your preferred time slot and enter the unique voucher code from your Time Out booking confirmation, here.
- Voucher must be purchased and ball pit session booked before entry to the venue.
- Voucher valid until 30 September 2023.
- This offer is restricted to those aged 18 and over. Valid ID is required for entry.
- Offer not valid on student nights.
- Ballie Ballerson reserves the right to offer another cocktail choice of the same value if necessary.
- Location: 97-113 Curtain Road, London EC2A 3BS.
- This voucher cannot be cancelled, amended, exchanged, refunded or used in conjunction with any other offer. For full terms and conditions, please see here.
5. Sit down and tuck into a grand Italian feast at the Museum of the Home
☆ Things to do, ☆ Food and drink events ☆ Hoxton, ☆
Think of your dream dinner party... then dial that vision up to 11 because mightly quaffable Italian beer Birrificio Angelo Poretti is offering Londoners a seat at it’s very own summer banquet and you can expect something straight out of your tablescaped dreams. Poretti has teamed up with Insta famous Mob Kitchen for the feast with recipe developer Jordon Ezra King creating an authentic three-course Italian menu that pairs perfectly with, you guessed it, ice-cold carafes of Poretti beer.
The beautiful Museum of the Home in Hackney will be hosting a huge banqueting table where 100 guests will sit down and tuck in over three sittings (12.30pm-2.30pm; 4pm-6pm; 7.30pm-9.30pm). Expect dishes you’ll want to photograph for posterity, the chance to chat to new people and decorations that’ll transport you straight to northern Italy. Bellissimo.
Buy Ticket
Which areas are experiencing an increase in house prices?
With two-thirds of homes experiencing a rise in value over the past year, is it possible that yours is among them?
we track the value of 30 million homes, updating our estimates every month.
Our latest analysis shows that the value of UK housing remains healthier than many may have anticipated.
In the last year, 2 out of every 3 homeowners saw the value of their home increase by at least 1%.
It’s a piece of positive news for many homeowners and sellers, who may have anticipated a different outcome.
However, house prices are now rising at a very slow pace - and some homes are posting small price falls.
Executive Director - Research, says: ‘Homeowners thinking about moving will be reading the news headlines but national averages can be dangerous when making decisions on your own home.
‘The reality is that market conditions can vary widely by local area and property type.’
Home values hold steady
From February 2020 to June 2022, the average UK home increased in value by an almost unprecedented £48 per day, adding around £36,000 to the overall value on average.
But the last 12 months tell a different story.
The average UK home has since increased by £19 per day, adding around £7,000 on average.
While our latest analysis shows 2 in every 3 homes increased in value by at least 1% over the last year, when looking at the last 6 months, this slows to just 1 in 3.
And falling values are increasing, with 1 in 4 homeowners experiencing a value loss of £7,700 (around 2.6%).
This shows that the impact of weaker demand is now affecting house prices.
Why aren’t house prices rising much any more?
Since the middle of last year, the economic backdrop has become more challenging, impacting housing value growth.
Tripling mortgage rates over the last 18 months and cost-of-living pressures are adding to the squeeze on household budgets, leading to weaker demand for homes.
That means the huge growth in house prices we saw over the pandemic years has now stalled and property prices are rising very slowly.
With anticipated price corrections, we expect more homeowners to see either more limited gains or modest decreases in their home values over the coming months.
Where are homes going up in value in the UK?
The impact of recent value changes will be felt differently across the country.
In northern England, the Midlands and Wales, 4 in 10 homeowners saw the value of their homes grow since November 2022.
Yorkshire and the Humber has four postal areas in the top 10 regions where values are up: Halifax (67%), Wakefield (65%), Huddersfield (59%) and Bradford (52%).
Top 10 regions where house prices are rising
| Postal area | Region | Proportion of homes with value increase since Nov 2022 | Number of homes increasing in value |
|---|---|---|---|
| Halifax | Yorkshire & The Humber | 67% | 40,000 |
| Derby | East Midlands | 65% | 1,734,000 |
| Wakefield | Yorkshire & The Humber | 65% | 126,000 |
| Huddersfield | Yorkshire & The Humber | 59% | 55,000 |
| Wolverhampton | West Midlands | 57% | 75,000 |
| Dorchester | South East | 56% | 46,000 |
| Chester | North West | 54% | 129,000 |
| Galashiels | Scotland | 53% | 16,000 |
| Hereford | West Midlands | 52% | 32,000 |
| Carlisle | North West | 52% | 62,000 |
| Bradford | Yorkshire & The Humber | 52% | 104,000 |
Zoopla
However it’s a different picture in southern England, Scotland and Northern Ireland, where only 1 in 4 homes has increased in value (3.1million).
In London, the South East and Eastern regions, 1 in 5 homes has increased in value.
That’s because property values in the south are higher, often exceeding £300,000, which means people need bigger mortgages to buy them.
With mortgage rates currently high buyers are wary, reducing demand for these more expensive homes.
From the South, only Dorchester makes our top 10, where 46,000 homes have increased in value since November 2022.
And homeowners holding off their next move until they grow more equity are unlikely to see meaningful additions in the coming months.
What types of homes are holding their value?
As cost-of-living pressures intensify, many buyers are looking for more affordable properties.
Smaller homes - terraced houses, semi-detached homes and apartments - are keeping their values better than the more expensive detached houses and bungalows.
But location is key.
Semis in Yorkshire, where 4 in every 5 homes have held or increased their value, are doing better than elsewhere in the UK.
In Scotland, only 50% of semi-detached homes have held or increased their value.
Flats are also holding up more than detached houses or bungalows, especially in the affordable markets that attract value-conscious buyers.
In Darlington, Lincoln and Wolverhampton, only 1 in 14 flats has lost any value.
Terraced homes are also holding their own, with more than 64% holding or gaining value since November 2022, especially in cities like Manchester, Leeds, Birmingham and Bristol.
However, the larger homes which became so popular during the pandemic: spacious detached houses, 4-bed homes and bungalows, are now less appealing to buyers, as they become more value-conscious in the face of rising mortgage rates and cost of living pressures.
And prices are adapting accordingly. More than 43% of detached houses and 42% of bungalows have lost 1% of their value in the last 6 months.
Coastal areas like Brighton, Norfolk and Southend-on-Sea are feeling the pinch, where 7 in 10 bungalows are losing value.
Sellers with bigger homes should be prepared for buyers wanting to negotiate harder on the prices.
That said, given the strong value gains these homes experienced during the pandemic, the growth in equity achieved may soften the impact of price reductions without limiting budgets for the next move.
Conclusion
What’s happening in the UK housing market is quite complex at the moment.
Home values are moving in different directions within different local contexts.
The state of the local economy, facilities in the area and differences in the types of homes available will continue to influence home values.
Key takeaways
- The average UK home has gone up £19 a day in value over the last 12 months, an annual increase of £7,000
- A third (9.2million) of UK homes saw their value increase in the last 6 months
- A further third of homes held their value
Properties Experiencing Significant Value Decline in June 2023
Introducing our "Value of Housing" report, which meticulously monitors the value fluctuations of 29 million homes across the UK. In the latest update for June 2023, we bring attention to the specific types of properties and locations that have experienced a decline in value.
More than a third of UK homes have lost value in the last 6 months, wiping £85 million from the housing market.
That’s 11.1 million properties that are less expensive than they were last November, each losing an average of £7,700.
But UK homes are split almost equally between those gaining value (32%), those seeing no real change (30%) and those losing value (38%) over the last six months.
So what types of properties are losing the most value? Are detached houses finally better value for money?
And where exactly should you look if you want to get a bargain?
We’ve got all the answers for you, whether you’re looking to buy your first house or your forever home.
After all, we track the value of 29 million homes in the UK - even if they’re not on the market.
So let’s see what type of property you should set your sights on - and which locations - to benefit from the latest shift in the UK housing market.
Which kinds of properties are losing value in June 2023?
The search for space has well and truly dwindled, and more larger homes are losing value than smaller ones in the UK.
Over the last 12 months, buyers have been scaling back their home requirements as the economics of buying a home have become more challenging.
It’s in stark contrast to 2020 to 2022, when extra space became the top need for buyers and high demand for larger properties boosted their value growth.
If you want to upsize from a smaller home, flat or terraced house, your current home should hold its value and you’re more likely to get money off a larger home.
43% of detached houses have fallen more than 1% value
Detached houses are losing value more than any other property type in the UK, with 43% losing at least 1% in the last 6 months.
Detached homes with falling values are most common in the St Albans, Perth and Worcester areas, where they make a 9 in 10 of such homes.
7 in 10 bungalows fall in value in the last 6 months
Bungalows account for 8% of all UK homes and 7 in 10 bungalows have recorded a fall in prices since November 2022.
Coastal areas such as Brighton, Norfolk and Southend-on-Sea are seeing the most hits to bungalow prices.
Homes losing value in the South of England, Northern Ireland and Scotland
In some respects, home values are more about where you want to buy a home, rather than what sort of house you want to live in.
The South of England, Northern Ireland or Scotland have the highest proportions of homes losing value, giving buyers the opportunity to buy at a lower price in these locations.
On the other hand, the most homes are rising in value in Northern England, Wales and the Midlands.
The top 10 locations where homes are losing value
While some regions are faring better than others, there’s a lot of complexity in the current UK housing market.
Home values move in different directions within different local contexts, such as the state of the local economy, local facilities and types of homes.
For example, West Central London is seeing a huge 68% of its homes lose value, with an average fall of £13,000 since November 2022.
One key trend we’re seeing is a fall in property values in coastal locations in the South of England.
| Postcode area | Region | Proportion of homes with value decrease since November 2022 | Number of homes decreasing in value |
|---|---|---|---|
| West Central London (WC) | London | 68% | 7,000 |
| Colchester (CO) | East of England | 67% | 109,000 |
| Canterbury (CT) | South East | 66% | 28,000 |
| Kilmarnock (KA) | Scotland | 65% | 19,000 |
| Norwich (NR) | East of England | 64% | 33,000 |
| Brighton (BN) | South East | 63% | 35,000 |
| Southend-on-Sea (SS) | East of England | 62% | 24,000 |
| Torquay (TQ) | South West | 59% | 25,000 |
| Truro (TR) | South West | 59% | 27,000 |
| Blackpool (FY) | North West | 58% | 21,000 |
Value of Housing Report - June 2023, Zoopla
67% of properties in Colchester (109,000 homes) have lost value by more than 1% in the last 6 months, while 66% have fallen in value in Canterbury.
Many homes in Norwich and Southend-on-Sea have also lost value - 64% and 62% respectively - while 63% of Brighton properties have lost value since November 2022.
Torquay and Truro in the South West also make the list, with 59% of homes in these areas declining in value over the last 6 months.
Buying a home that’s falling in value: what to think about
Your first thought when you see that home values are falling might be that it’s a good time to buy and get a bargain.
This is true to an extent, but you’ll also need to consider any potential for negative equity, as well as the fact that you’re likely to pay a higher mortgage rate now.
Negative equity unlikely with 5% house price falls this year
Our data suggests that house prices will fall by 5% over the course of 2023.
That means you’re unlikely to move into negative equity if you were to buy today - as long as your loan-to-value ratio is lower than 95%.
However, it’s worth knowing that the years of strong price growth are behind us.
It’s always best to buy your next home based on your personal needs and circumstances, rather than looking to make gains or play the market.
A high fixed rate might be worth a lower property price
Higher mortgage rates might be limiting your move right now, and understandably so.
Our recent analysis showed that buying power is hit by up to 20% with a 6% mortgage rate compared to a 4% one - which is putting a strain on home buyers despite falling house prices.
Our mortgage calculator can help you work out how your monthly repayments are impacted by a higher mortgage rate.
Adrian Anderson from property finance specialists Anderson Harris says a high fixed rate mortgage may be worth it now prices are falling, if you’re sure you can afford it.
“It’s usually better to purchase a property at a lower purchase price with a more expensive mortgage in the short term, than pay a higher price for a property and a cheaper mortgage in the short term.”
Always talk to a specialist mortgage advisor to understand the best option for you.
Look for value-adding potential to buck the trend
One way to offset potential price falls for a home you buy is to consider its value-adding potential.
By renovating a doer-upper, you can buy for a lower price and look to increase your return when you sell.
Key takeaways
- Over the last 6 months, 11.1 million or a third of UK homes have decreased in value by at least 1%
- Larger detached homes and bungalows are more likely to be falling in value than any other property type
- Some coastal areas in the South of England are seeing more than 65% of their homes lose value
- Across UK regions, home values are falling the most in the South of England, Scotland and Northern Ireland
- If you want to buy a home that’s dropping in value, think about the risk of negative equity and the impact of higher mortgage rates