Housing Market update November 2022

Annual house price growth slows

Αnnual house price growth softened in August but remained in double digits for the tenth successive month. Meanwhile, prices rose by 0.8% on a monthly basis after taking account of seasonal effects – the thirteenth consecutive monthly increase for this measure.

Modest slowdown
In the past two years, the average house price has increased by almost £50,000. Indeed, the fact that 10% growth is considered a softening says a lot about the current market.

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said, “There are signs that the housing market is losing some momentum, with surveyors reporting fewer new buyer enquiries in recent months […] However, the slowdown to date has been modest, and combined with a shortage of stock on the market, has meant that price growth has remained firm.”

Energy price cap rise
In September, the new Prime Minister Liz Truss announced that the government would cap household energy bills at £2,500 for two years.

The Energy Price Guarantee, expected to cost up to £150bn, will limit the price that suppliers can charge for each unit of energy. Specifically, the average unit price for dual fuel customers paying by direct debit will be limited to 34.0p per kilowatt hour (kWh) for electricity and 10.3p per kWh for gas.

EPC you later
Before the support scheme was announced, when the energy price cap had been set to rise by 80%, average bills were expected to increase more for properties with worse energy efficiency ratings, according to Nationwide. Houses with an energy performance certificate (EPC) rating between A and C would have paid £1,700 more each year, compared to £3,900 for F-to-G-rated properties.

Now, as well as seeing their bills capped, less efficient homes will benefit from the scrapping of green levies, which currently add £150 to bills each year.

Outlook for 2023
House prices are predicted to flatline next year1, analysts predict, as rising interest rates and inflation put pressure on households. By the end of 2024, the same research expects house price growth to rise modestly to 2%.

Aneisha Beveridge Head of Research at Hamptons, pointed to “a cocktail of risks on the horizon,” which make stalling growth likely next year. She commented, “Financial pressures are raining down on households as inflation bites and mortgage rates rise. And it’s unlikely we’ve seen the worst of it yet, with rates expected to peak at the beginning of 2023.”

The analysis also foresees transactions falling by 12% in 2023 before rebounding in 2024 as a result of households who delayed a move in 2023 taking advantage of declining interest rates.

Mortgage deals at a time of rising rates

After increasing the Bank Rate to 2.25% in September, the Bank of England (BoE) has since said it will ‘not hesitate’ to hike rates further to curb inflation.

Variable rates
Changing rates have a significant impact on the amount you repay on your mortgage. Those on a tracker mortgage will see their rate increase (or decrease) directly in relation to the Bank Rate. Standard variable rates (SVR) also rise or fall according to this rate.

Is now the time to fix?
Fixed-rate mortgages, on the other hand, are protected – for now. If you’re on a fixed-rate deal, you won’t see any changes in your mortgage until your plan ends. But when it does, you will automatically be switched to your lender’s SVR, which will probably be more expensive.

If you are tempted to take out a new fixed-rate deal, you also need to be aware of any penalties you might have to pay for leaving your current deal early.

Tailored advice
Rising rates are prompting more people to carefully consider their options. Everyone’s circumstances are different, which means it is always best to seek personalised advice. Get in touch today to find out how we can help.

Are ultra-long mortgages the answer?

As interest rates continue to soar, the government is considering ultra-long mortgages as a possible means to boosting homeownership.
For some, a longer mortgage term could be a leg-up onto the housing ladder. Longer mortgage periods allow potential homeowners to borrow larger sums, which should allow access to a greater variety of available homes.
Yet calculations have shown just how expensive these deals could end up. One estimate for an average mortgage puts monthly repayments at £1,140. Over a 50-year term, that would mean £472,984 paid in interest alone!
Whatever the government chooses, Alica Baker Consultancy will be here to help you achieve your property goals.

Rising FTB deposits

The average initial cost of a first-time buyer’s (FTB) mortgage deposit has climbed by 41% (after adjusting for inflation) in the last decade1, new research has shown.
With the average UK house price currently sitting at £278,436, the largest initial hurdle facing homebuyers is the mortgage deposit. Based on the average of 15%, this initial outlay comes in at a hefty £41,765 – after adding stamp duty, surveyors’ fees and the cost of moving, the total can easily reach £50,000.
Just a decade ago, the average FTB deposit was £21,236. Such a rise illustrates the extra challenge many now face to get a foot on the housing ladder.

What will it cost?
Financial products involve a commission, and I may need to charge a fee for the time I spend on your case. This will typically be £350 and is payable upon an application being processed.
Please call me for a free no-obligation discussion. I will advise you how to get the best possible mortgage deal for your personal circumstances.

Alicia Baker Consultancy
To find out about any of my financial services. Please contact me for a free no-obligation discussion. I can find you the most appropriate mortgages, home insurance and personal insurances, such as life and critical illness cover to protect you and your family.
Alicia Baker Consultancy is an Appointed Representative of Stonebridge Mortgage Solutions Ltd, which is authorised and regulated by the Financial Conduct Authority.
Your home may be repossessed if you do not keep up repayments on your mortgage. As with all insurance policies, conditions and exclusions will apply.


As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.