Is the UK housing market so expensive?

There is a lack of housing stock and strong demand for dwellings, which seem to be the primary long-term driver. While this is a contributing aspect, the Bank of England claims its record low-interest rates have been the driving force behind the property market. If you want more information, visit property press for more information.

For over a decade, interest rates have been at their lowest level. In response to rapidly rising inflation, the Bank of England has raised the base rate five times since December 2021, at a record low of 0.1 percent. Currently, the interest rate is 1.25 percentage points.

The housing market hasn’t seen the effects of the credit crunch yet since borrowing money to purchase a house is still affordable, particularly for those with large down payments. Because mortgage repayments will rise due to higher interest rates, this might hurt the housing market.

The primary reason for a downturn in the housing market is expected to be an increase in the cost of living. Fewer individuals can extend themselves to purchase a home as family finances tighten.

House prices in the United Kingdom

In the second half of 2020, the UK’s average home price growth picked up speed, and this pattern persisted for the next two years. Demand for homes hasn’t decreased despite the expiration of the stamp duty holiday and vacation in October 2021 as projected. In 2022, house prices soared to all-time highs.

Despite this, some statistics suggest that growth may have slowed. In May 2022, the Nationwide building society reported yearly rises of 11.2 percent, indicating a decline. According to the National Association of Realtors, the average price of a property is currently £271,613. As of June 2021, this figure was roughly £30,000 greater than in September 2009, when the swine flu epidemic began.

Despite this, data from Halifax shows a different picture. In June, the average price of a home was £294,845—13 percent more than it was a year earlier. Additionally, the rise from the prior month’s 1.2 percent to this month’s 1.8 percent represents a monthly gain.

What will happen to property prices in 2022?

The UK property market may or may not fall in the future, but that seems improbable. House prices continue to rise due to a lack of homes on the market and high demand. The rising cost of living is one reason that might put a damper on the recent phenomenal rise. For most people, increasing inflation and tax increases mean they have less money to spend purchasing a home.

With less demand and smaller deposits, the increase in housing prices may decelerate. A catastrophe is improbable, but the cost-of-living problem implies that a home price rise may slow down in the coming months even if a crash does not occur.


The key factor that seems to be acting as a long-term driver is the fact that there is a significant demand for residential properties but an inadequate supply of homes. The Bank of England asserts that despite this being a contributing factor, low-interest record rates have served as the primary engine behind the booming real estate market in the United Kingdom.