Market Trends of UK Real Estate Industry
Increasing in the United Kingdom House Prices
Several factors influence average house prices. A lack of supply means that demand for housing and, as a result, a competitive market will drive up house prices. On the other hand, an oversupply means that prices will fall to encourage buyers. The following factors influence average house prices: Economic growth, unemployment, interest rates, and mortgage availability.
A lack of supply means the demand for housing and, therefore, a competitive market will push house prices up, whereas an oversupply means prices will fall to encourage buyers. This is certainly the case when it comes to average house prices across the UK. In June 2022, London had an average house price that was about twice as high as the national average, at GBP 539,000 (USD 6488021). The capital of England also has the UK’s highest average house price.
Within London, house prices varied wildly. The average house would cost more than GBP 1 million (USD 1.20 Million) to live in the borough of Kensington. On the other hand, a property in the outer borough of Barking would cost around a quarter of the average house in the borough of Chelsea. In 2022, UK housing transactions reached an all-time high of 1.3m. As the number of transactions increases, so will the UK average house price.
Rise in Population is driving the market
In the period from 2010/11 to 2019/20, the number of new homes in England increased by 1.819,200, meaning a growth rate of 8.0%. Over the same period, the population of England increased by 4.090,600, meaning that for every new house built, the population increased by 2.25 people.
GDP per capita in the United Kingdom in 2022 was GBP 32,904 (about USD 40,936.27), which is an increase of GBP 1,090 (about USD 13,788.48) compared to 2021. People are looking for bigger homes in the UK, especially in suburban areas.
The proportion of new homes per head of population varies across the country. In the northeast, where there has been slower population growth, there were 1.3 new homes built for every new person. In the capital, where housing supply lags behind demand, the ratio was 3.4 homes per new home. Due to COVID-19 and the Ukraine War, more and more people are working from home, so the demand for residential as well as rental property is growing in the country.
