UK house prices hit record high

It’s official: the average UK house price has soared to an eye-watering £300,000.

According to Halifax, this marks a 1.3% increase in November alone.

You might think that after the pandemic, a cost-of-living crisis and a mortgage market meltdown, prices would have dipped.

Instead, they’ve climbed by more than 25% over the past five years.

Regional variations

It’s worth noting that £300,000 isn’t the price tag for homes everywhere in the UK.

 Here’s a quick look at regional averages:

• Scotland: just over £200,000
• Northern Ireland: just over £200,000
• London: a whopping £545,439

All regions are seeing growth, often outpacing income increases.

Factors fuelling the rise

Mortgage rates have been very low in recent years, which has pushed house prices up.

After the financial crisis, the Bank of England lowered rates, making it cheaper to borrow money.

This encouraged more people to buy homes, driving prices up.

Government incentives, such as cuts to stamp duty and help-to-buy schemes, increased demand even more.

Banks have also made it easier for people to borrow larger amounts than before.

Changing buyer behaviour

The Covid-19 pandemic made many people reconsider their housing needs.

Many sought larger homes, often moving out of London.

When estate agents reopened, keen buyers quickly jumped back into the market.

Even with mortgage rates at about 5.49%, buyers are changing their approach.

People are choosing longer mortgage terms to manage costs, with first-time buyers averaging 31 years.

The future outlook

December is typically a slow month for house sales.

That said, the strong desire for homeownership and increasing rents suggest prices could keep rising.

As long as owning a home is important to many people, we may see prices reach new highs again.

Check out our mortgage and rent advice page to find out more.