£2K average house price jump since mid-2015
According to a recent article on thisismoney.co.uk, the average house price has risen by more than £2,000 a month since summer 2015. Reporting statistics from the high street lender Halifax, the article explained that prices have been driven by a shortage of homes. The Royal Institution of Chartered Surveyors confirms that the stock of homes for sale is at a record low and that prices have been affected by an imbalance in their supply and demand.
Property commentators, however, offered another explanation for market prices. They say that it could have been driven by buy-to-let investors who were attempting to beat the increased taxes on property purchases introduced in April.
Indeed, the continuous rise in house prices has occurred alongside an explosion in the number of private rented sector homes. According to the Wilts and Gloucestershire Standard, there has been a 346 per cent increase in the number of households in the UK who rent privately.
A question of affordability
The hike in property prices far outstrips the rise in wages over the last few years, and median earners in the large majority of local authorities in England and Wales can no longer afford median-priced properties.
The most affordable places to buy homes are located in the North and Wales, with County Durham, Glamorgan and Liverpool topping the list.
The UK rental market
Landlords who rushed to buy homes before the Stamp Duty deadline are beginning to rent them out, according to the BBC, which resulted in an 11.5 percent rise in rental listings in April.
Increased supply should theoretically equate to a decrease in the cost of renting, and there is evidence that rents across England and Wales have been dropping for quite some time. Rents can vary widely, however, with those looking to rent a flat in Gloucester (http://www.tgres.co.uk/properties-to-let), for example, with its average rental price of £672 per month, at an advantage over those looking for rentals in London, where the average price is £1,500 per month.
Rebalancing the property market
The 3 per cent stamp duty and tighter regulations on mortgage lending are expected to put a check on house prices, while demand is likely to be affected by the anticipated rise in interest rates by the Bank of England later in 2016.