The average UK house price increased by 10.8% in the year to December, putting further pressure on buyers as interest rates and taxes rise.
According to the latest UK house price index from the Office for National Statistics (ONS), house prices climbed rose £27,000 to £275,000 in December. Price increased 0.8% from November.
The news comes as inflation hit a 30-year high of 5.5%. Consumers are bracing for a manifesto-busting increase in income taxes in April and eye-watering 54% increase in household energy bills.
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The ONS said the average house price across the whole of the UK, as well as in England and Wales, reached record levels in December, with Welsh prices up 13.0% year on year to an average record level of £205,000. Scotland recorded an 11.2% increase.
English property values were up by 10.7%, with the average house price at a record high of £293,000 in December.
Myron Jobson said many first-time buyers were disillusioned by the constant struggle to get onto the property ladder.
Read about the UK Housing Market via our Specialist Residential & Buy to Let Division
“Runaway price rises mean property values are through the ceiling of what many buyers can afford to pay. Add to that surging inflation, which has climbed to a 30-year high and outstrips wage growth, the spectre of higher interest rates to combat it and the cost-of-living squeeze, home ownership will remain a pipe dream for many. And they can’t rely on the Bank of Mum and Dad, which might need extra cash to shore up its financial position amid the escalating cost of living crisis.
“The stock of available homes remains significantly lower than demand for property and continues to drive up prices, forcing many to think twice about moving home. This mismatch is likely to underpin the housing market in the coming months.
Sarah Coles added: “Right now, there’s a floor under prices, because of the shortage of properties for sale, after a year and a half of buyer numbers rising and seller numbers falling.
“However, early indications from RICS are that the new year encouraged more sellers into the market, which should make life easier for buyers, but could weaken price rises.”
By Frank Prenesti
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