Planning to buy a house? You better get saving, because the average cost of a home in the UK has reached an all-time high of £338,447.
The North East of England remains the cheapest place to buy a home, with prices averaging £166,723. London is, once again, the most expensive, with the average property price reaching an eye-watering £645,268.
The figures, released by Rightmove, are the result of a “stark imbalance between supply and demand,” the home property site said. Its analysis identified a shortfall of 225,000 homes for sale which, if available, would have helped keep prices down.
The stamp duty holiday has been partially responsibly for a surge in demand, leading to the busiest first half of a year ever recorded by Rightmove. In 2021, the average house price increased by £21,389 (+6.7%) in just six months. But campaigners say a lack of affordable housing was already a problem, long before Rishi Sunak’s plan to get the market moving.
Commenting on the latest figures, Anya Martin, director of the housing campaign group PricedOut, says the situation is going from “bad to worse” for renters and potential first-time buyers alike.
“Our decades-long failure to build enough new homes means that prices have continued to rise consistently. And the lack of a steady and reliable output of new homes also means that house prices are highly vulnerable to wild peaks and crashes, dependent on credit and tax conditions,” she tells HuffPost UK.
“Government needs to address the barriers to building new homes and stop tinkering around at the edges with policies like Help to Buy that do nothing to make housing cheaper. Otherwise we are going to see more young people permanently priced out of the homes they want and need.”
Here’s the full breakdown by region.
Average house price UK: £338,447
Scotland: £171,902
Wales: £230,759
North East England: £166,723
Yorks and Humber: £217,344
East Midlands: £258,697
North West: £255,261
West Midlands: £259,337
East of England: £392, 889
London: £645, 268
South West: £349,089
South East: £450,644
With house prices so high, it’s now cheaper to rent a property than it is to buy a home, for the first time in more than six years. But, let’s face it, rent is still pretty extortionate, even if the pandemic has led to a (slight) rental price drop.
The stamp duty chaos surrounding house buying may have lessoned, but it hasn’t ended, either. While there was no tax on the first £500,000 of properties up to June 30, the stamp duty changes wind down, not end overnight. From June 30, the threshold dropped to £250,000 until September 30. Stamp duty thresholds will return to normal levels from October 1.
All this means you might want to wait if you’re looking to move home, says Jo Thornhill, mortgages expert at MoneySuperMarket.
“Firstly, if you’re actively looking then you’re racing against time as the tax break comes to an end in September,” she previously told HuffPost UK. “Another factor to consider is that house prices which are priced too highly could cause short term trouble. This is because when the rush dies down, you may discover that your property is worth less than what you originally paid for it.
“With these points in mind, you may want to consider biding your time rather than rushing into purchases. But, if you do choose to make the move then make sure you’re acting with the bigger financial picture in mind.”