As the cost of living crisis continues to deepen its claws into various facets of society, whether it be the overbearing fuel prices or grocery shopping inflation, the opportunity of getting on to the property ladder is becoming an increasingly more expensive feat.
Recently published statistical reports from both the Nationwide Building Society and HM Land Registry have painted a clear picture of the current housing market in the UK, as well in Bristol and the costly South West of England region.
Record high average prices are being recorded country-wide, but there are warning signs of a tentative fall in cost at some point in 2022.
How much have house prices risen in the Bristolian city over the last year? Why are they rising and when can we expect them to fall? BristolWorld has you covered with everything you need to know.
Why are house prices so high?
A report from Nationwide Building Society has confirmed that the UK currently has record high house prices as of June 2022.
Across the country, the average house price in this month was £271,613, which is an increase of 10.7 percent or 0.3% month on month.
But why is this the case? Why is the housing market so expensive right now?
Back in May 2022, the Bank of England warned of a potential 16 percent fall in property prices as a result of the Covid-19 pandemic, but it now appears the market has defied the odds and gone the other way.
This is due to various factors, such as:
- Pent up demand for housing
- Small supply of housing, so unable to match the demand
- Growing desire for more space and rural living amongst the population
- Low mortgage rates
How much have house prices in Bristol risen by?
Information supplied by HM Land Registry - which is a non-ministerial department of the UK government - shows that house prices in Bristol and the surrounding have risen considerably over the period of April 2021 to April 2022.
It states that the average price of property in England during this time was £299,248 with an annual increase of 11.9 percent, but how does Bristol compare?
The South West of England was the fastest growing region during this annual period with a sudden increase of 14.1% - way above the national average.
The average property price in the City of Bristol in April 2021 was £310,194, but as of April 2022 there has been an increase of 9.4 percent; just below the national average.
In April 2022, your average property will cost £339,501.
However, during a one year period there has also been a drastic reduction in the amount of property sales in the City of Bristol, with 347 (February 2022) compared to 728 (February 2021).
When are the prices expected to fall?
Speculation is growing across the housing market that prices could drastically fall at some point in 2022, subsequently making property more affordable.
Tim Bannister, who is Rightmove’s Director of Property Science, is an example of someone who predicts this will happen:
“After a very strong first half of the year, it is likely that the housing affordability crunch will have a greater impact on market behaviour in the months ahead, with further interest rate rises anticipated during that period” he said.
“This, alongside more choice coming on to the market for buyers and the usual seasonal variations we would expect, means there are likely to be some month-on-month price falls during the second half of the year.”
There are warnings that due to the current cost of living crisis and the Bank of England’s expectation of inflation hitting 10 percent by the end of this year, there is a slight chance that the UK will go into a recession, which will subsequently lower house prices.
This is due to the fact that during such a time, many prospective buyers will be unable to afford to purchase a home and banks will be more reluctant to lend.
For example, during the 2008 housing crisis, the average property price in the UK plummeted by an astounding 10%.