Traditionally, the housing market in September remains gripped by the post-holiday season lull, but this year, things are very different. In fact, according to Rightmove's House Price Index, the average house price in England and Wales in September shot upwards to hit a new national record of £294,834
This new record is up by 0.9% on August's average of £292,284, with properties in England and Wales rising by an average of £2,550 over the month – the largest rise seen in September since 2002. This also reflects an annual increase of 6.4%, matching the rise seen in the year to August.
The family-home sector was largely behind the leap to a new national record, with price for second-stepper homes and top-of-the-ladder properties (three or more bedrooms) both increasing by an average of 1.2% over the month. Property price rises were also notably led by the south: all southern regions recorded a price rise over the month and all 15 of the most expensive counties (which again are all in the south) saw an increase, some of which were double the national average of 1.8%. Conversely, properties typically reserved for first-time buyers fell by 1.1% over the month, while all northern regions recorded a drop in average house prices.
But why are property prices being driven so high, particularly for property-rich owners?
Well, a lack of housing supply is once again at the root of the problem. Year-on-year, the number of properties coming to market has dropped by 6%, leaving buyers fighting for the available homes. At the same time, demand is being driven by low mortgage rates and the delay of a base rate rise. The result, as Miles Shipside of Rightmove comments, "is the biggest monthly price rise seen at this time of year for 13 years".
This situation is also "leading to some extremes in market forces in different sectors and parts of the country", explains Miles. Previous price rises in the first-time buyer market have priced some would-be owners out of the market, leaving owners of properties who are suitable for this market having to reduce their prices. Conversely, "those who own property that is in most demand, either by type or location, are seeing their values continue to rise. Their properties are rich in features and benefits that others want to buy, and as a consequence they are getting proportionately richer than either owners of less desirable homes or those who are not on the housing ladder at all".
Getting the property of your dreams
This latest price hike is enough to put fear into anyone who is struggling to make the move on or up the property ladder, particularly if you are aiming for one of the more popular property types in a desirable location. However, all is not lost!
While you're waiting for the opportune moment, amass the best deposit you can by saving regularly into a competitive savings account. A regular saver can be ideal for this purpose – check out our best buys to see if you can find an account that suits you.
If you've already got the deposit sorted, you need to be ready to pounce on your dream home by lining up a mortgage. Rates are currently resting at competitive lows, but they won't last forever, so now is the time to secure yourself a great deal. Base rate is bound to rise in the near future, so it may be a good idea to get yourself a competitive fixed rate deal – take a look at these best buys. This way, you can ensure that you have affordable repayments for the next few years.
Whatever you do, don't despair! Keep saving, and keep and eye on the market, and you may be collecting the keys to your home before you know it!
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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