11 months ago • 2 mins
UK house prices saw their biggest January jump since before the pandemic, according to news out on Monday.
What does this mean?
Retailers the world over might be slashing their prices this January, but British homeowners seem immune to the widespread discount fever. According to Rightmove, the average price of a house in the UK is up around 1% since December, sitting at a cozy £362,000. But let’s not get carried away: January’s jump probably doesn’t herald a whole new year of climbing prices. It’s more likely that this month’s early birds are trying their luck, crossing their fingers and listing their homes at prices that they’re unlikely to actually fetch.
Why should I care?
Zooming out: Staying put.
Rightmove’s data also revealed that there’s been a surge in home valuation requests this month, with plenty of homeowners interested in selling up at some point. That might sound like good news for would-be first-time buyers, especially when renting a tiny studio will cost you a mansion-sized sum. But unlocking the door to homeownership depends on affordability, and right now the property market’s too hotly priced for most first-timers. There are two ways that can improve: either house prices fall or mortgage rates drop – and neither of those options looks likely anytime soon.
The bigger picture: Patience is a virtue.
There's a glimmer of hope on the horizon, and strangely enough, it comes in the form of rate hikes. See, some British homeowners got a little overambitious when interest rates were rock bottom, and borrowed more than they could afford. And when the time comes to renew their mortgages, they might find themselves struggling to keep up with payments. That could force them to sell up, and when it comes to price negotiations, forced sellers rarely hold the cards. In other words, hold tight, would-be homeowners: house prices might take a tumble yet.
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