Property Price Increase of 7.6% Compared To January 2021

Property price increase of 7.6% compared to same time last year
The latest House Price Index released by rightmove shows that average property prices have increased by 0.3% in January 2022 to £341,019 from £340,167 in December 2021.

The last time there was such a big annual property price increase was in May 2016, where the annual growth rate was 8.3%. One reason for the big increase is the fact that in January 2021 there was an unusual drop, as the rush to complete before the stamp duty holiday ended in March eased off.

With 1.4%, first-time buyer homes have seen an even bigger monthly increase and the average price for a first-time home stands at £214,176 in January 2022.

Why Is The Property Price Increase So High?

In the last months of 2021 we have seen a shortage of available properties on the market, while the demand has stayed high. This trend has continued into the start of 2022.

Per estate agent branch, there are only 12 homes available for sale this month, 2 fewer than in December 2021. This increased the demand and means that properties get sold much quicker. In December 2021, houses sold, on average, two weeks quicker than in December 2020.

This lack of available properties has increased the demand and the competition between buyers. To secure their dream properties and outbid their competitors, buyers are willing to pay higher prices. This behaviour was the driver behind the property price increase we have seen.

Is there an end to the property price increase in sight? This depends on what happens with the number of properties available for sale.

All of the signs suggest that prices are likely to continue to rise until more choice is available.
Three regions are in most urgent need of new supply, the East Midlands, South West and South East of England, as they are now at unsustainable rates of annual price growth above 10%.

Tim Bannister, Director of Property Data at rightmove

What Is Likely To Happen In The Coming Month?

The good news for eager home buyers is that there are signs that the situation is improving. Already, on Boxing Day 2021, we have seen the highest number ever of new properties coming on the market. These were a welcome site for home-buyers, and they were snapped up quickly.

Even more encouraging, 44% more requests for valuations have been received by agents in the first working week of the New Year than at the same time last year. So this could mean that we will see a more balanced market in 2022 and an end to the property price increase levels we have seen in the past month.

However, it will take some time to see the impact of the increase in valuations being booked and valuations translating into more properties being for sale.

Especially, because there has also been a 15% increase in enquires from people interested in buying a new home. This means demand is still outstripping supply by far, with the level of interest from buyers per property almost 100% more than in January 2021.

This means we have a very fast market and would-be buyers need to be quick off the mark to secure their dream property. Because only 30% of the properties that are currently on the estate agent’s books are still available, with 70% sold subject to contract.

To make sure you put yourself in the best possible position in this fast market, you should only look for a new house when your house is on the market, or ideally, has already been sold subject to contract.

Almost 40% of people enquiring about a home who have a property to sell say that they are yet to put it on the market. In the current market, where they are competing against other buyers who are able to move more quickly, this is likely to mean they’ll miss out on the home they want. To put yourself in the best possible position to proceed, you should become a ‘power buyer’, by making sure your current home is on the market or preferably sold subject to contract first, before starting the search for your new home

Tim Bannister, Director of Property Data at rightmove

So, while the housing market still favours the sellers at the moment and the property price increase we have seen at the start of the year, might not be the last one. There are signs that more properties will come on the market soon, giving frustrated and stressed would-be buyers hope, they will soon be able to secure the house of their dreams.

High property prices are not only bad for our bank accounts, but inflated prices can also lead to a mortgage valuation being lower than the agreed purchase price. Read more about what to do if the mortgage company’s valuation is lower than the purchase price.

Author

  • News Desk

    Our news desk team includes a qualified architect, a freelance journalist, and a fanatical property expert who has over 12 years experience in the industry.

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