Average interest charged on a two-year fixed rate mortgage breaks through 4% barrier

Longer-term fixed rate deals offer better value to homeowners amid rising interest rates.

The average cost of a two-year fixed rate mortgage has broken through the 4% barrier for the first time in nearly a decade.

The typical interest rate charged on one of the deals is now 4.09%, according to financial information group Moneyfacts. That’s the highest level since February 2013.

The interest on fixed rate deals has risen 1.75% since the Bank of England first started increasing interest rates in December 2021. It’s up by 0.14% since the beginning of August 2022 alone.

While mortgage rates are rising across the board, longer-term fixed rate deals for five or even 10 years continue to offer better value for homeowners.

Why are we seeing fixed rate mortgages rise?

 

The Bank of England’s Monetary Policy Committee has increased the official cost of borrowing in a bid to combat high inflation.

They’ve increased the base rate by 1.65% since December 2021.

But unlike variable rate mortgages, the cost of new fixed rate deals is not based on the Bank of England base rate.

Instead, fixed mortgages are based on swap rates. This is the cost of borrowing money for a set period of time.

Swap rates are based on a number of different factors, including potential future interest rate changes.

With inflation remaining stubbornly high, further interest rate rises are expected in the months ahead.

That’s why the average cost of a fixed rate mortgage has increased by 1.75% since December, when the base rate has only risen by 1.65%.

What should I do if I need to remortgage?

 

With two-year fixed rate mortgages starting to look expensive, you may want to consider locking into a mortgage deal for a longer period of time.

You’ll be charged an extra 1.75% on a two-year fixed rate loan on average compared to December 2021.

But it’ll only be an extra 1.6% on a five-year loan, which now stand at an average of 4.24%.

This has led to the premium you’ll pay for the security of fixing for a five-year period, rather than a two-year one, narrowing to just 0.15%. That's half the level of 0.3% it stood at in December.

If you can lock in for even longer, ten-year fixed rate mortgages also look good value. You’ll be charged an average interest rate of 4.2%, slightly lower than that for five-year deals.

But before you opt for a longer-term fixed rate mortgage, make sure you won’t need to exit the loan early.

Exit penalties on 10-year fixed rate mortgages can be as high as 8% of the outstanding mortgage debt, so think it through before you jump in.

What about tracker mortgage deals?

 

Tracker rate mortgages currently look cheap compared with fixed rate ones.

The average interest rate charged on a two-year tracker deal is standing at 3.33%.

But remember that the cost of these mortgages moves up and down in line with the Bank of England base rate.

With some economists predicting the base rate could increase to 3% or more, the rate you pay on a tracker mortgage could rise to more than 4.5% in the next few months.

 

What else do I need to know?

 

The mortgage market is currently moving very quickly.

Be prepared to move fast to secure a deal that you like the look of.

Lenders have pulled 269 deals since the beginning of the month, with the typical mortgage product only available for 17 days before it is withdrawn.

Eleanor Williams, finance expert at Moneyfacts, said: “We’ve seen lenders withdraw parts of, or entire product ranges, with a number citing the pause in lending being due to unprecedented demand.

“Providers need to manage their service levels following an influx of applications, as borrowers have rushed to secure deals before rates have a chance to climb even further.”

Remember that you can ‘book’ a mortgage rate up to six months before your current one expires.

So, if you are coming to the end of a mortgage deal, try to lock into a new one now, before interest rates rise again.

Key takeaways

• The average cost of a two-year fixed rate mortgage has broken through the 4% barrier for the first time since February 2013
• Five-year and 10-year fixed rate deals currently offer better value to homeowners
• People remortgaging need to move fast, with lenders pulling deals after an average of just 17 days

 

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by Blackstones

Mortgage rates expected to rise again as inflation soars above 10%

Homeowners have a month in which to remortgage before the Bank of England’s next interest rate setting meeting.

Key takeaways

• Inflation soared to a new 40-year high of 10.1% in July
• The rise makes it likely the Bank’s Monetary Policy Committee will increase interest rates again when it meets on 15 September, possibly by as much as 0.5%
• Homeowners who are coming to the end of their mortgage deal have a month to secure a new one before the interest rate setting meeting takes place

 

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by Blackstones

Will there be a housing crash in 2022? Here’s what the data says

Spoiler alert: no, we don’t think there’ll be a housing crash in 2022. Let’s take a look at why the UK market is on track to avoid any major falls in house prices.

The housing market’s set to slow down later this year. There’ll be fewer sales and house price growth is easing.

But buyer demand is still tracking in line with last year, as we explain in our latest House Price Index.

The market’s proving more resilient than anyone expected, even in the face of economic headwinds.

And we don’t see a housing crash on the horizon.

Why not?

Well, a huge amount of change since the Covid-19 pandemic has opened up the housing landscape in the UK.

It’s given us greater choice over where we live, highlighted our relationships with our homes, and altered our reasons for moving.

And the housing market’s in a very different position to the last time we saw house prices fall, after the global financial crisis of 2008.

Let’s take a look at what’s changed in the last few years, and why it means there won’t be a housing crash.

House prices aren’t as overvalued as they were in previous economic cycles

 

“House prices tend to fall when they get too high and out of kilter with incomes,” says Richard Donnell, Executive Director of Research and Insight at Zoopla.

“In the past, this has gone hand in hand with more relaxed mortgage lending.

“In 2007, more than a third of buyers taking out a mortgage didn’t prove their income to the bank. And almost a fifth were getting mortgages when they had small deposits of less than 10%.

“This led to house prices shooting up. Then, when mortgages dried up and the economy went into recession, prices fell back.

“The difference now is that there are much tougher rules to get a mortgage.

“You must prove a lot more about your income and outgoings. People usually have much more than 10% deposits so they are less vulnerable to possible negative equity.

“In short, we don’t have the scale of over-valuation of housing that we’ve seen before.

“This puts the market in a much better position to weather high mortgage rates and the increased cost of living.

“The housing market is not immune from these pressures and some will already be feeling the squeeze. But the likelihood of big price falls is much lower than in the past.”

House price growth has spread across the country

 

House price growth has spread around the country.

It’s no longer London and the South East that are tracking the biggest house price gains.

Instead, we’ve got the South West, Wales and the Midlands seeing double-digit house price growth.

With higher demand in new areas, the value of housing has started evening up across the country.

In fact, the average UK home has risen by £48 a day since February 2020. That's the equivalent of £38,000.

 

And when you’ve seen your house price rise, it’s another incentive to sell. Many people want to release equity or take the chance to upgrade their home.

More people want to move because of the pandemic

 

In a recent survey, we found that 22% of people were more keen to move house since the pandemic. Only 6% were more keen to stay put.

Of existing homeowners, 19% were eager to move because of the pandemic.

Those figures might not sound very high.

But when only 4% to 6% of owner-occupiers move house each year, it’s a massive proportion.

Was this just a short-lived, post-lockdown thing?

Nope.

We asked consumers the same question in 2022. And for those who want to move home, they’re even more certain it’s the right choice.

“The data suggests that attitudinal changes have matured,” says Richard. “They’re both more considered and more embedded within households.

“And when you have buyers with their mind set on a move, the market will keep moving too.”

Thinking all these committed buyers have already made a move?

Only 1 in 17 privately-owned homes changed hands in 2021. That means plenty of people who want to move and haven’t yet taken the plunge.

Hybrid working is here to stay

 

In February 2022, 42% of people plan to work mostly from home, according to the Office for National Statistics. That’s an increase from 30% in April 2021.

That’s around five million more workers who are now able to work from home when they want, and a total of 9.7 million people.

“We’ve seen a strong trend between home working and the desire to move home,” says Richard.

“Our consumer survey found that home workers are five times more eager to move than those with more traditional working patterns.”

54% of those who expected to work from home more said they were more eager to move, compared with 13% who expected to do less working from home in future.

Working from home patterns have been a major contributor to the demand to move home in the last two years. We expect this influence to continue in the years ahead.

First time buyers are more motivated to get on the ladder

 

The working from home trend has granted a huge amount of opportunity for first time buyers.

“In our survey, renters were the most keen to move house out of anyone” says Richard.

“25% of renters said they were more eager to move because of the pandemic.

“With less of a need to live close to the office, first time buyers can look further afield for their home.”

We’ve seen a marked increase in the radius that first time buyers are searching in since the pandemic.

“A first time buyer in London now considers homes in an area 33% bigger than pre-pandemic,” says Richard.

“And first time buyers outside of London stretch their search by a further 20% since the pandemic.”

“This shows that many first time buyers would rather get on the ladder now in a cheaper area using their current savings, than wait until they can afford a more expensive area.”

We’re still keen to swap city life for country living

 

It’s been one of the biggest talking points about the housing market since the pandemic.

That we all want to switch the city for a slower pace and more space.

And our research shows this trend is even more pronounced a couple of years on.

“Back in July 2021, people living in major cities were far more likely to want to move house (36%) than those in rural areas (3%),” says Richard.

“Fast forward to spring 2022, and 44% of city dwellers want to move to a more rural location.”

“Interestingly, more rural homeowners fancy a move this year, too (8%).”

“This is typically older homeowners looking to downsize. The influx of demand to rural areas has created more opportunities to relocate closer to family or take equity from their current home.”

More people are retiring

 

Almost half a million older workers have left the labour market since the pandemic.

A huge 63% of adults aged 50 to 70 left their job sooner than expected, according to the Office for National Statistics.

Leaving work to retire was the most commonly reported reason (47%). But 15% of retirees said they left because of the Covid-19 pandemic, and 13% cited illness or disability.

Retirement is a common trigger for selling your home.

You might want to be closer to family and friends. Some are looking to embrace a new lifestyle or indulge in a passion, while others want to downsize and release some equity.

There may be other practical reasons for a move in retirement, like the need for good public transport or healthcare nearby.

With 75% of older households (65+) owning their home outright (GOV.UK), this group has the means to make a move that suits their lifestyle. They’re keeping momentum in the market by offering homes for sale while also buying a new place.

Rising mortgage rates won’t hit existing homeowners too hard - but it will prompt some to move

 

Half of all homeowners have a mortgage, and the rest own their homes outright.

Of homeowners with mortgages, 90% are on fixed rate deals for up to 5 years. Many are on low rates of sub 2%.

So most homeowners with mortgages will be unaffected by interest rate increases due to their fixed rate.

And if they got their mortgage post-2015, they will have had to prove they can afford a mortgage rate of up to 7%. This means many homeowners will be able to absorb additional cost pressures on their budget.

Rising interest rates can also prompt some savvy homeowners to make a move. If they’re coming to the end of their fixed term, a move could help them lock in a rate they might not see again for several years.

With most mortgage offers lasting just six months, this impact will dissipate soon. But we expect it to be one factor that keeps the market buoyant in late 2022.

 

Key takeaways

• House prices aren’t as overvalued as they were in previous economic cycles
• Value has spread across the country, giving more people the ability and motivation to move
• More people are working from home, retiring and reevaluating their lifestyle, which all prompt sales and purchases
• Nearly a quarter of people said they want to move house since the pandemic, but only 1 in 17 privately-owned homes changed hands in 2021

 

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by Blackstones

What does the latest house price data mean for you?

Will your home keep rising in value? Should you hold off from moving? And will there be a housing crash? Here’s what the latest data from our House Price Index means for you.

There’s a lot of noise around the UK housing market. And it can be hard to know when to stick, twist or make your dream move.

Richard Donnell, Director of Research and Insight, answers some of the most common questions about the UK housing market and how it will affect your home or move.

Will my home continue to rise in value this year?

 

“The vast majority of UK homes have risen in value over 2022 and most will continue to do so over the rest of the year, albeit at a slower pace.

“The outlook for home values really depends where you live and how affordable homes in your area are, compared to the wider market and nationally."

“Price growth is much lower in the more expensive parts of the UK where prices are high and many times the average salary. If you live in London or the South East, you’ll see a slower rate of growth.

“But if you live in a more affordable area, there’s much more room for prices to increase. Even if mortgage rates keep rising.

"So if you live in Wales, the South West or the East Midlands, you’ll continue to see strong growth in the value of your home in the second half of the year."

Is now a good time to put my home up for sale?

 

“The average homeowner moves once every 20 years. It’s a big decision and is likely to be linked to what’s happening in your life, whether it’s finding a partner, starting a family or retiring.

“Lots of people worry about timing their move with market trends but this is rarely a successful approach.

“It's all about whether it’s the right time for you and your family.”

“Beyond that, it’s about getting the best advice to make your move successful.”

“The most valuable thing you can do is speak to an estate agent long before you want to make your move.

“Agents are always willing to give would-be sellers advice on the market. They can also recommend what you can do to make your home as attractive as possible to buyers.”

“Don’t wait until you’re ready to put your home on the market or have found your next home.”

If I put my home on the market now, how long will it take me to sell?

 

“The average time to sell a home across the UK is currently 21 days. This compares to 22 days a year ago.

That’s 21 days from listing your home to accepting an offer. It could be a further 1 to 3 months for the legal side of things to go through.

“But keep in mind that the average sales period varies market to market and by price level."

“Ultimately, the time to sell a home will depend on each home and its asking price – and how closely this is linked to what buyers in the area want to pay.

“While the market has been hotter than normal recently, more expensive homes tend to take a little longer to sell. It’s the same for homes that are little out of the ordinary from the typical three bedroom semi-detached house."

Which types of properties are most in demand at the moment?

 

“Three bedroom houses have been the most in-demand properties in the last three months.

“44% of all enquiries on Zoopla are for three bedroom houses.  The pandemic has driven a ‘search for space’ which has boosted interest in these family homes.

“But cities tend to have a greater supply of smaller homes and apartments, and this is matched by greater demand for them. This is particularly the case in London and Scotland, where apartments are most in demand.”

Will there be a housing crash?

 

“We can never say never, but no – we don’t think there will be a housing crash.

“Double digit falls in average prices are highly unlikely, even as we face higher mortgage rates and increases in the cost of living.

“House prices only tend to fall when there are forced sellers. That’s people who can’t afford their mortgage and have no option but to sell.

“But in the UK, less than half of homeowners have mortgages. 85% of those who do have mortgages are on fixed rates for 3 to 5 years. This insulates the market from short-term changes in mortgage rates.

“We already have tough affordability checks for buyers, too. History shows that falling house prices tend to be preceded by looser lending standards.

“For these reasons, we expect slower rates of growth or flat prices rather than big price falls.

“It would take interest rates rising much higher or for the strong labour market to turn on its head before we saw a housing crash.”

I’m a first time buyer. Should I buy now or hold off?

 

“At a time of increased uncertainty, like now, some first time buyers are waiting as they think homes may become cheaper.

“But the reality is that there have only been 31 months with house price falls in the last 20 years. Those months were all between 2008 and 2012.

“So I wouldn’t wait and hope for homes to become cheaper. Prices are set to keep rising slowly in most places.”

“If you think your household income will be steady or rise over the next 2 to 3 years, there’s limited point in delaying.

“Just spend plenty of time doing your research. Find a home that meets your needs and for which you feel you’re paying a fair price. Get advice about mortgage finance to help with this.”

I’m looking to downsize. Will I be better off moving now or later?

 

“In my opinion, worrying about the housing market and what will happen to prices should come second to your personal motivations for moving.

“You might’ve realised you have too much space or are facing high running costs.

“You might want to move closer to friends and family. Or look to take some equity out of your current home to fund your retirement or specific purchases.

“Whatever the market’s doing, there are ways to maximise the value of your home when you sell.

“It starts with talking to a local estate agent. They can tell you what buyers are looking for and what you can do in the current market to get the best sale result.”

 

I’m a homeowner. What do rising interest rates mean for my mortgage?

 

“85% of people have opted for a fixed rate mortgage in the last few years, often up to five year terms.

“If you still have several years left on your fixed term, interest rate rises won’t impact you until then.

“But higher mortgage rates will be an issue if you are coming to the end of your initial term for your fixed rate.

What changing interest rates could mean for you

“It pays to shop around and look for the best mortgage from different lenders. But keep in mind that lenders always look to offer their current customers some of the best deals.

“It’s probably unrealistic to expect a fall back to the low mortgage rates we’ve seen in the last few years.

“But even with the recent increases, borrowing costs are low by historic standards.”

Key takeaways

• Your home will probably continue to rise in value during 2022, albeit at a slower pace
• You’re likely to sell in 21 days if you put your home on the market now
• The most valuable thing you can do? Get personal advice from a local estate agent long before you’re thinking of selling

 

 

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by Blackstones

The 20 locations where homes sell the fastest

Where do homes sell the fastest, and what factors impact the speed of sales? Our research reveals the top 20 locations where homes are selling the fastest in 2022.

Dartford, Redditch, Test Valley and Gloucester are the fastest moving property markets in the UK.

Homes listed for sale in these areas take just 14 days to sell.

If we look at regions, the South West and the West Midlands have the fastest moving housing markets in 2022.

But the stories behind the fast sales are different across the country.

Where you live, the type of property and the price of your home will all impact how quickly it sells.

The top 20 places where homes sell the fastest

What's happening in the hottest housing markets?

Dartford, Kent

While several other commuter markets have slowed down since last year, Dartford’s kept its place as one of the fastest selling areas.

With house prices still affordable and good commutes into London, buyers in Dartford are having to move quickly to land the home they want.

Two bedroom terraced homes are selling the fastest in Dartford. In terms of price bracket, you’ll sell the fastest if your Dartford home is priced between £250k and £300k.

This is the cheaper end of the market, with average house prices in Dartford at £344,500 in May 2022. This size and price signals that first time buyers are driving the fast-paced market in Dartford.

Redditch, Worcestershire

Homeowners in this West Midlands area have seen a dramatic improvement in how quick they’ll sell this year.

It’s dropped to 14 days, putting it at the top of the list.

In 2021, Redditch was the second fastest moving market. But it took much longer to sell your home, at an average of 27 days.

In terms of property type and pricing, owners of three bedroom terraced properties in Redditch are getting the fastest sales.

And you’ll sell your Redditch home the fastest if it’s priced between £200k and £250k.

Test Valley, Hampshire

Test Valley in Hampshire is another place where it takes only 14 days to sell your home.

But the fastest selling homes here are more expensive than other hot markets. Homes between £350k and £400k sell the quickest in this part of Hampshire.

Although this range is more expensive than other areas on the list, it aligns with the average local property price of £365,000 in May 2022.

There’s high demand for family homes and space in Test Valley. That’s shown in three bedroom semi-detached homes selling the fastest.

Gloucester

Like several areas in the South West, Gloucester is seeing very fast sales this year.

In particular, three bedroom semi detached homes are flying off the shelf. In terms of price, those between £250k and £300k are the fastest to sell.

This price range is lower than the average house price in the area, which was £222,400 in May 2022.

If you live in Bristol, Plymouth, Exeter, or Swindon, you’re seeing sales go through almost as quickly. They all make it into the top 20 fastest moving markets.

How has the UK market changed in the last year?

What’s really noticeable this year is the fast pace of urban markets in the South West. They feature much more prominently than last year.

If you live in or around Bristol, Plymouth, Exeter, Gloucester or Swindon, you’re likely to sell within 14 to 17 days.

Two and three bedroom terraced homes are selling the fastest in South West cities.

The only exception is Bristol, where you’ll sell fastest if you have a three bedroom semi-detached house.

It's a similar picture in the West Midlands, too. Redditch, Rugby, Stoke-on-Trent, Nuneaton and Bedworth, Worcester and Stafford are all in the top 20 hottest markets.

There’s still a fast pace within city markets, which is a trend we saw last year and previously. Around 12 of the 29 fastest markets featured before the pandemic.

But we’re seeing a shift away from the pandemic-led choices of buyers in 2021.  Back then, lots of us were looking for coastal areas and commuter towns. But they no longer feature as much in the fastest markets.

Which areas have seen the most improvement in the time it takes to sell?

House sales in West Oxfordshire have sped up the most in the last year.

It now takes 24 days for an offer to be accepted, compared to 37 in June 2021.

Lancaster and Ealing are in joint second place. If you live in these places, it’ll now take you 21 or 31 days respectively to sell. That’s 12 days faster than this time last year.

As interest in the London property market picks up again, London and the South East have also seen big improvements in the time it takes to sell.

Kensington and Chelsea, Richmond Upon Thames and Wandsworth are all in the top 10 most improved.

Cherwell and Windsor and Maidenhead also make the list. Homes in these areas are selling 9 to 11 days faster than last year.

Carlisle and the Vale of Glamorgan make the top 10 too, having seen a dramatic change in time to sell. They’re now at 18 and 19 days respectively, both a drop of 9 days since last year.

What are the fastest moving housing markets in London?

Bexley is the fastest-moving housing market in the capital.

It takes homes in Bexley just 16 days to sell, with two bedroom terraced properties selling like hot cakes.

The fastest selling properties in Bexley are priced between £400k and £450k.

Waltham Forest is the second hottest housing market in London, with homes selling in 17 days.

It’s four bedroom terraced homes and those priced between £550k and £600k that are being snapped up the fastest.

These areas are outperforming the rest of London. On average, it takes 35 days to sell your home in the capital. That makes it one of the slowest regions in the country.

Is now the time to sell?

If the average sell time is low in your area, it’s a sign of strong demand.

It usually means there’s more buyers looking for a new home than there are sellers. And that there aren’t enough suitable homes on the market for them all.

That can lead to buyers competing for the house they want. When this happens, it’s quicker for the seller to get an offer they like the look of.

Key takeaways

• It takes just 14 days to sell your home in the UK's fastest markets: Dartford, Redditch, Test Valley and Gloucester
• Urban housing markets in the South West and West Midlands have picked up pace, with homes selling in 14 to 17 days
• There are areas all over the country where you can expect to sell your home in less than 3 weeks

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by Blackstones

Pandemic housing boom creates 270,000 property millionaires

Demand for property was up nearly 60% over the last two years, while supply drained to 40% below the norm. Which meant only one thing: house prices increased as the nation got moving.

Nearly 10m homes shot up by £50,000 in value over the last two years, as the pandemic created levels of demand from buyers not seen since 2006.

The average home went up £48 a day as the world entered a new phase of flexible working from home, freeing up home buyers to shop further afield in new locations.

Demand was so high, running at 58% above the five-year average, that supply levels took a hit, with the number of homes for sale falling to 40% below the five-year average.

This, in turn, pushed house prices higher at rates not seen for 16 years, as buyers competed to secure the homes of their dreams.

 

Total value of UK homes passes £10 trillion mark 

For the first time, the total value of the UK's 29.5m homes has surpassed the £10 trillion mark, as £1.3 trillion was added to the property market during the course of the pandemic.

The overall value of UK homes now stands at £10.1 trillion.

Where the biggest value rises were seen across the country

Region	Value of housing today	Value pre-pandemic	Change in value	Average property value
Wales	£335bn	£274bn	22%	£201,000
South West	£965bn	£803bn	20%	£320,000
North West	£765bn	£636bn	20%	£192,000
East Midlands	£569bn	£476bn	19%	£235,000
Yorks and Humber	£547bn	£460bn	19%	£186,000
West Midlands	£671bn	£573bn	17%	£225,000
North East	£213bn	£182bn	17%	£144,000
South East	£1,879bn	£1,633bn	15%	£394,000
Eastern	£1,109bn	£964bn	15%	£350,000
Northern Ireland	£143bn	£125bn	15%	£158,000
Scotland	£493bn	£435bn	13%	£164,000
London	£2,398bn	£2,248bn	7%	£516,000
UK as a whole	£10,088bn	£8,809bn	15%	£266,000

Homes in Wales saw the greatest increase in value since the pandemic began in February 2020, with house prices up 22% on average.

Wales was hotly followed by the North West and South West, where prices rose by 20% in both areas.

In London, which lagged behind the rest of the country both in terms of demand and price rises throughout the pandemic, the increase was just 7%.

That’s less than half the national average increase, mainly because the average property in London costs 11.5 times the average salary, putting property prices way above the rest of the country.

The ability to work from home also dented demand for homes in the capital - and particularly demand for apartments.

The high value inner areas of London were hit too as the world came to a standstill.

With no city buzz to enjoy, home hunters began searching for more space in idyllic locations by the sea or in the countryside instead.

Despite that, when looking at the whole of the UK, London and the South East still account for 23.5% of the total value of our housing.

However, that share has fallen from 26% pre-pandemic.

One in three homes shot up in value by more than £50,000

Of the UK's 29.5m homes, nearly a third, or 9.4m, have grown in value by more than £50,000 since the start of the pandemic.

Our data shows the UK's more affordable regions saw the biggest gains, as flexible working opened up the housing landscape to buyers.

Executive Director says, "An exodus of older workers from the labour market over the pandemic, together with more working from home, is driving more households to look further afield for their next home to get greater value for money."

That said, where homes are already more expensive, gains could also be seen.

London and the South East account for over 3m of these rising properties, while in the South West, nearly 2m grew by more than £50,000.

A further 9.4m homes across the country increased by £25,000-£50,000 in value.

How homes went up in value across the UK

Price change	Number of homes	% of UK homes
Unchanged or lower	1.7m	6%
Increase up to £25K	8.8m	30%
Up £25K - £50K	9.4m	32%
Up £50K - £75K	4.6m	16%
Up £75K - £100K	2m	7%
Up £100K or more	2.9m	10%

Value of Housing Report

"The gains over the last year are the largest since 2006 but they are far from uniform," says Donnell.

"Every homeowner experiences the impact of the market through the changing value of their own property.

"Rising home values unlock new opportunities for homeowners considering their next move."

But there have also been losses in value across the UK

A total of 1.6m homes (that’s 5.7% of the total housing market) have either stayed the same price or lost value since the pandemic began.

Of these, 800,000 have seen a value decline of 5% or more.

These homes can mostly be found in inner London, where the impact of the pandemic has hit travel, working patterns and demand for homes.

Westminster, Kensington & Chelsea, Islington, Hammersmith & Fulham, Tower Hamlets and Southwark all suffered losses in the capital, accounting for 28% of that 800,000 - or 224,000 homes.

In Scotland, Aberdeen and Aberdeenshire, where the economy suffers from the historic decline in oil prices, accounted for a further 6% of homes declining in value - or 48,000 homes.

"Not everyone has seen home values increase," says Donnell.

"Affordability is holding back prices in London and southern England and our analysis reveals the centre of gravity of the housing market is shifting northwards.

"The largest gains in value are being seen in more affordable areas where there is further room for price growth, even with modest increases in mortgage rates."

Key takeaways

• A third of UK homes went up by more than £50,000 during the pandemic
• In rises not seen since 2006, 270,000 homeowners have now joined the millionaires' club
• The average UK home has earned £48 a day since February 2020

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by Blackstones

8 ways to tell if your home is winning the value race

We’re not saying it’s a competition. But you might be winning. Want to know if your home’s gaining value faster than a mate's?

House prices have shot up at rates unseen since 2006 in the last two years. In April, the UK’s average house price reached £250,000 for the first time ever.

But not all homes and areas are equal.

Keen to find out if yours is a hot property?

Here are seven ways to tell if your place is winning in the house price race.

1. Keep an eye on their home

It’s not stalking. It’s keeping an eye on the market.

At Zoopla, you can get track any home to get the latest price estimate.

And you can see how its estimate has changed over the last two years.

Track as many homes as you like, any time you like, for as long as you like.

And we’ll send you the new price estimate every month.

Job done.

2. Track your home

Be proud. It’s yours and you love it. You might have put a lot of work into it.

And you must be wondering how your bricks and mortar is performing in value.

And if your area's on the up? And if everyone wants a property like yours?

So tell us you own it.

We’ll show you the rest.

3. See what’s for sale nearby

Who doesn’t love a little nosy around the neighbours’ house?

Well, we can do better than that.

We can let you know the asking price of any home that comes up for sale in your area.

Or if they’re not for sale, we’ll show you what they last sold for. Whether it was last week or last decade.

After all, it just provides a good benchmark for yours, right?

4. Keep up with the housing market

It’s good to have a feel for what’s right when it comes to property.

The more you get to know the market, the more your instincts will take over when it comes to knowing what a home’s worth.

There’s no secret to it. It’s just about staying in the loop.

It’s a snapshot of what’s going on across the country. You’ll be a property expert in no time.

5. Find out what improvements they’ve made

As you run your fingers over their new marble kitchen worktops, you might be wondering how much value that work has added.

But what really ups the price of a home? A landscaped garden, a brand new bathroom or a kitchen extension?

6. Eye up their kerb appeal

A home that looks great from the outside could really give it the edge in the house price race.

It’s all down to that first impression.

But who’s dressed to impress, and who’s left dead in the water?

7. Suss out their home’s style

Major developers don’t get interior designers to stage their homes for nothing.

Stylish decor is thought to add up to 10% to a home’s value.

A few tweaks could help you edge ahead in the house price stakes.

8. Get an estate agent’s opinion

If you want to know exactly what your home’s worth, there’s only one way to know for sure.

We’ve got loads for you to choose from, and they’ll know your local market like the back of their hand.

They might even be able to choose a winner.

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by Blackstones

6 ways to make your house a smart home

Smart home tech can help you save time, money and energy – plus it can add value to your home. Here's how to turn your house into a smart home.

45% of people in the UK already have smart home technology. And it’s expected to hit nearly 85% by 2026, according to Statista.

It’s not going away any time soon. But is smart tech really all it’s hyped up to be?

Let’s take a look at the benefits of smart home tech and how you can turn your house into a smart home.

First of all, what is a smart home?

A smart home is a house with electrical items that are connected to the internet. They’re all linked up to your phone and each other through Wi-Fi, 4G or Bluetooth.

This means you can control appliances and monitor usage through your phone.

As well as switching things on and off, you can set schedules and triggers for a group of connected devices.

So you could set your smart speaker to recognise “Good morning”, and it would get the coffee brewing and your favourite radio station playing.  All before you get out of bed.

Or you could set the oven to warm up and the heating to come on when you leave work. It’ll be all ready for you when you get home.

Smart home appliances all come together to help you save time, energy and money.

What are the benefits of a smart home?

1. Smart tech helps you save on energy

You might be looking to reduce your impact on the environment or keep your energy bills down.

Smart devices can help you save energy by turning appliances on and off as you need them.

It won't matter if you forget to turn the lights or heating off when you leave the house. You can just do it on your phone instead.

2. It can help keep your home safe and secure

Keeping your home safe and secure is a great benefit of smart technology.

You can keep an eye on things while you’re away and set triggers to deter burglars.

Surveillance cameras can ping you if they detect movement outside your home.

You can run smoke and CO2 detectors from your phone too.

3. It's convenient 

A lot of people like smart home technology because it makes life easier.

You can set appliances to turn on and off in line with your daily routine. And change their schedule just as your plans change.

4. Smart tech can add value to your home

A home with integrated smart tech will often have a higher value than a similar non-smart home.

Many buyers are looking for more convenient ways to live, and smart home integration does just that.

Energy efficiency is also high on the list for buyers, and smart homes can help keep energy usage to a minimum.

6 ways to make your house a smart home

1. Choose your smart ecosystem

The smart ecosystem lays the foundations for your smart home.

Think of it as the network for your smart devices and appliances. If they’re all designed to work on the same network, they’ll work better together.

Apple, Google and Amazon are behind the three main ecosystems at the moment. They all have similar features, so it’s down to personal preference.

Keep in mind that most smart devices are designed for a particular ecosystem. It’s not always easy (or possible) to use a device designed for Apple as part of an Amazon ecosystem.

2. A smart speaker

The next thing you’ll want to get is a smart speaker.

A smart speaker means you can control all smart aspects of your home with your voice.

Choose the speaker that fits with your ecosystem – so Alexa for Amazon, Google Nest for Google or Apple HomePod for Apple.

You can then turn things on and off with just a word or phrase.

Or you can then set up rules to trigger multiple actions from your speaker at one time.

3. Smart plugs

Smart plugs are an easy and affordable way to make your home smart, without buying loads of new appliances.

A smart plug can turn an ordinary lamp, coffee machine or TV into a smart appliance. Once they’re plugged in, you control them from your phone or speaker.

Just like smart appliances, you can schedule smart plugs to turn on and off with your schedule.

You can label your smart plugs too. So if you ask Alexa to turn the kettle on, it’ll know which plug you’re talking about.

4. A smart heating system

A smart heating system is one of the best choices to save on energy bills.

86 per cent of users claimed a smart meter has helped them reduce their spending, according to The Coexperts.

You connect your phone to the smart thermostat and get total control over your heating.

Some smart heating systems can work off the GPS location of your phone. So it could tell when you’re nearly home and turn the heating on for you.

Or it could detect when you leave the house and automatically turn the heating off and save you energy.

Smart heating systems can also give advice on how you can use less energy. They can suggest automations to help you manage your home’s temperature.

5. Smart lighting

Smart light bulbs are another popular smart home product.

Smart light bulbs are very energy efficient and they’re fairly easy to install.

You replace your normal light bulbs with smart ones and connect them to your smart ecosystem.

The cheapest smart light bulbs will allow you to control the lights from your phone. You can set rules to turn them off as you leave the house or when it’s time for bed.

More expensive versions change colour or connect to your TV. If connected to a TV, smart lighting can automatically match the mood of a film or programme you’re watching.

6. A smart security system

Smart cameras are a great way to boost the security of your home. They can also make sure you don’t miss deliveries.

A video doorbell is a popular and easy to use option. It uses a camera to pick up if someone’s outside your house.

A livestream from the camera then feeds through to your phone.

If security's a concern for you, you can add more features to a smart security system. You could incorporate motion sensors around your home and garden, as well as sirens and door and gate locks.

A local estate agent can give you the most accurate estimate of your home’s value.

If you’ve got smart home tech – or are thinking about adding it – they can let you know how it changes your home's value.

 

Key takeaways

• Smart home technology can make your home safe, secure and energy efficient
• You can control appliances and energy usage through your phone
• Choose a smart home ecosystem and smart speaker to lay the foundations for your smart home
• Add smart appliances or just start with smart plugs to turn ordinary items into smart ones

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by Blackstones

7 ways to improve your home's EPC rating

Rising energy bills and a hunger for greener living mean a good EPC rating is now more important than ever. Here’s how to get one for your home.

An Energy Performance Certificate (or EPC) rating is essentially a review of a property’s ability to use energy efficiently.

All homes must have an EPC certificate when being sold or made available for rent.

The certificate is valid for 10 years.

What’s a good EPC rating?

An EPC certificate rates a property’s energy performance through a grading system of A to G, with A being the most efficient and G being the least.

A property with an EPC rating of C or above is generally thought to be pretty good. The average home in the UK has a rating of D.

New-build homes generally have higher scores, as they tend to be around 60% more energy efficient than older homes.

Buildings with higher EPC ratings are more popular with buyers and renters, especially in today’s climate of astronomically growing energy costs, as they’re cheaper to run.

From December 31, 2025, all landlords must make sure the buildings they are letting out to tenants carry an EPC rating of C or above.

You can find out the EPC rating of every property listed for sale or for rent on Zoopla on our listings pages.

Or, if you’re interested in a property that’s not currently on the market, you can find out their EPC rating through the government’s website.

How is an EPC rating decided?

An EPC rating is carried out by a government-approved energy assessor.

They look into the amount of energy a home uses per square metre and how much carbon dioxide it produces.

The average household produces 6 tonnes of CO2 annually.

The assessor conducts a measured survey of the property, examining the lighting, heating and hot water systems.

The certificate they produce then shows the current costs for running the home - and the potential costs if the assessor’s recommended energy-saving improvements are made.

It will also show the property’s overall rating from grades A to G.

What factors affect an EPC rating?

 

The assessor will look at whether the home has:

• energy efficient bulbs
• double glazed windows
• an energy efficient boiler
• thermostats for the home and individual radiators
• log, coal or gas fires
• loft and wall insulation
• pipes and water tank insulation
• renewable energy sources such as solar panels
• air/ground source heat pumps
• water-saving systems - such as dual-flush loos

How can I improve my EPC rating?

1. Use energy efficient light bulbs

They can cut lighting costs by up to 90%, so are well worth the investment.

2. Insulate your loft

It will help to prevent up to 25% of your heating escaping through the roof.

3. Consider cavity wall insulation

It can help to stop 35% of your heating from leaving your home and only takes a couple of hours to install.

Holes are drilled into the external walls of your property and insulation is injected into the cavity.

4. Replace your old boiler with an energy efficient new one

It could make a drastic difference to your fuel bills - and your EPC rating.

5. Invest in double or triple glazed windows

6. Seal any draughty parts of the house

Including floorboards, around windows and the front door.

7. Consider using an environmentally-friendly air/ground source heat pump

Is there financial help available to improve my EPC rating?

Yes, there is.

Energy companies will pay for insulation, glazing and even new boilers for people claiming certain benefits under the Energy Company Obligation scheme.

The Boiler Upgrade Scheme offers property owners £5,000 towards the cost of buying and installing an air source heat pump or biomass boiler.

Grants averaging £10,000 are also available to certain households to make energy efficiency improvements under the Green Homes Grant Local Authority Delivery Scheme.

Can I change my EPC rating?

If you think your EPC rating is wrong, you can contact the assessor who gave the home its rating.

Their name will be on the EPC certificate that was issued for the property.

You can ask them to reassess the property based on where you think the errors might have been made.

If you’re still concerned that an error has been made, you can appeal to the assessor’s accreditation scheme. The details for this can also be found on the EPC.

The rising cost of energy

In April this year, the energy price cap increased by 54%, meaning a typical household’s energy bills went up by around £700 a year from £1,300 to £2,000.

In October that price cap is set to rise again, taking the average household’s energy bills to just under £3,000.

After October, Ofgem is set to change the price cap every three months and bills are expected to remain high until October 2023.

Ensuring your home is as energy efficient as possible is now more important than ever, whether you’re looking sell, rent or stay put.

A few improvements now could save you hundreds of pounds in the long run.

Key takeaways

• Energy efficient light bulbs, double glazing and a decent boiler can all improve a home's EPC rating
• Insulation, thermostats and dual flush loos also help
• In October this year, the energy price cap will rise to just under £3,000. So anything you can do to improve your home's energy efficiency now is worth doing

 

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by Blackstones

If you’re looking to sell, now’s the time

As the housing market starts to slow, if you’re looking to sell your home, now’s a good time to do it.

The average UK property price has remained broadly unchanged this month, rising by just 0.1% since May, according to our latest House Price Index.

That’s the lowest rate of monthly price growth since December 2019, while the quarterly growth of 1.4% is the slowest since March 2021.

Year on year, property prices are up 8.4%, down from +9.2% in April and the rapid house price growth seen across the UK since the start of the pandemic has finally peaked.

Demand for properties still remains strong at 40% above the five year average, but that demand is beginning to decline week on week, as the market returns to more ‘normal’ conditions.

With that in mind, sellers looking to capitalise on gains made during the pandemic-driven property boom should act sooner rather than later.

The proportion of listings where asking prices have been reduced is also rising.

One in 20 properties (or 5.1%) showed a reduction of 5% or more in May. That's up from 4.7% in April.

The average price reduction is 9%, which, when applied to the average property price, equates to a discount of around £22,500.

That said, the number of new sales agreed is 21% above the five year average, showing there is still plenty of appetite among buyers, so now is still a good time to sell.

Gráinne Gilmore, Head of Research at Zoopla says: “Buyer demand is still strong in the housing market, but signals are emerging that the impetus may be easing, so those who want to make a move should investigate their options sooner rather than later.

“In addition, mortgage rates are likely to continue to climb, so locking into a rate shortly could save hundreds over the longer-term.

“There are many factors supporting the price growth seen since the start of the pandemic, not least the continued imbalance between demand and supply, but the increasing cost of living, increasing mortgage rates for buyers  and cloudier economic outlook will act as a brake on house price growth through the rest of the year.”

Where properties are being snapped up right now

Wales continues to be the hottest UK property destination, registering the highest price growth yet again at +11.4% year on year.

While this is down from a high of 13.4% in February, homes in Wales have risen by an average of £32,000 in the last 24 months, taking the typical house price to £192,500.

Homes are also selling like hotcakes in the South West, where properties are taking just 19 days to sell, subject to contract, from first being listed.

The South West has been basking in high levels of demand since the pandemic began, as  buyers swiftly prioritised rural and coastal settings as their places of preference.

A similar picture is emerging in Bournemouth, where price growth is up 10.2%, making it one of the cities with the highest levels of growth in the year leading up to May 2022.

That said, these speedy sales are expected to slow this year, as buyer demand for homes in the South West is seeing one of the sharpest declines over the last month, down 16%, despite demand for houses remaining 37% above the 5-year average.

Across the UK, the average time to sell (that’s the time between when a property’s first listed and when it becomes sold, subject to contract) is rising.

It’s now 22 days for May compared with 20 days in March, while the time it takes to get to the point of exchange is now averaging around 170 days - around five and a half months.

All of this suggests that buyers who want to move this year should consider putting their home on the market now.

Demand for holiday homes on the up

The holiday lettings industry has also played its part in boosting buyer demand since the pandemic began.

Around one in five purchases in the South West in 2020-21 were additional dwellings.

In the North of England, this figure was 26%, while in the capital it was 29%.

Where the property market’s a little cooler…

London continues to show the slowest price growth, with average property prices up +3.9% year on year, rising £30,000 over the last 24 months to £516,100.

Homes in London are currently taking the longest time to sell at 35 days.

The London market has been lagging behind the rest of the UK since the pandemic began, with the capital showing the humblest levels of house price growth since February 2020.

However, the tide is turning for the city. Buyer demand remains higher than the 5-year average - and 35 days to sell is significantly lower than the five year average of 50 days for May.

Meanwhile, prices in Aberdeen are down 2% on the year, a decrease of £6,400 over the last 24 months, meaning the average house price is now £140,200.

What do higher interest rates mean for house prices?

As the cost of living continues to bite, mortgage rates are rising as the Bank of England increases interest rates in an attempt to combat rising inflation.

Buyers are facing average rates of 3.37% for a five-year fixed-rate £250,000 loan now (with a 25% deposit), compared to 2.64% in December.

That means the annual cost of a £250,000 loan has increased by £870.

If five-year mortgage rates continue to rise by more than another basis point, taking them to around 4.62% (levels last seen in April 2010), the annual cost of a mortgage repayment would climb by £2,500, compared to December 2021.

If you’re a homeowner looking to move in the next two years

The rate of house price growth is expected to slow to 3% through the rest of the year, with prices rising at less than half the rate registered last year, where they were up 8.4%.

However, property prices are unlikely to decline as demand for housing remains high, despite falling back from record levels.

And the stress-testing for mortgages introduced since the global financial crisis means that many homeowners have proved their income can withstand rising interest rates.

That means the number of forced sales, which have a negative impact on pricing, is likely to remain limited.

The recent announcement that stress testing rules will be adjusted for borrowers, so they’ll no longer have to prove they can afford repayments at the Standard Variable Rate +3%, will mean some additional borrowers will be able to access loans, especially first-time buyers.

Mortgage affordability rules relaxed by Bank of England

However, the move is unlikely to make a significant change to lending levels, as the general rule for lending to be limited to 4.5 times a borrower’s income remains in place.

Plus, the majority of homeowners are also locked into a fixed-rate mortgage, meaning they are protected from the current interest rate moves.

Fortunately, the UK is currently enjoying a buoyant employment market, helping to offset the more challenging inflation environment for now.

Where is the market going in the next 3-6 months?

House price growth remains strong by any measure. The levels of annual growth seen over the last couple of months are the highest since late 2016.

However, there are now signs that the market is beginning to ease, despite demand levels remaining 30% above the five year average, as that demand is beginning to fall back from record peaks.

The market is still moving very quickly, but the time between listing a home for sale and that sale being agreed is starting to creep up, as the market returns to more normal conditions.

The economic outlook, and multiple base rate rises, are expected to lead to slower activity throughout the rest of this year.

That said, 1.2 million homes are expected to change hands across the UK in 2022.

Should I delay buying a home?

If you’re looking to buy a home, it’s best not to delay. House prices will continue to rise this year, albeit at a slower pace than we’ve seen over the past two years.

And Interest rates are likely to continue to increase, as the Bank of England tries to combat rising inflation, making borrowing more expensive.

If you’re looking to get a new mortgage or to remortgage, it’s best to choose a fixed rate option with the lowest possible interest.

Key takeaways

• House price growth is starting to slow with property prices remaining broadly unchanged since last month
• As the cost of inflation continues to bite, property prices are showing the lowest monthly price growth since December 2019
• Buyer demand is still 40% up on the five year average, but is starting to gradually decline, so sellers should act quickly to capitalise on recent gains

 

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by Blackstones