December

2022 was a year in which we saw record breaking price growth in the UK property market leading to a two-and-a-half-year growth number of 24%! As we went to press, the latest figures released by the UK ONS showed that asking prices were up 12.6% in the 12 months to October 2022, with the average cost of a London property now £542,000. The ONS also reported that transactions in October 2022 were 3.8% higher than those in October 2021.

At the same time, the latest figures from the Consumer Prices Index hinted that the rise in UK cost of living prices may have spiked and now be easing; falling to 10.7% in November from 11.1% in October. The latest news out of the Bank of England seemed to confirm this, supporting a slowdown in the pace of rate rises; the bank’s monetary committee raising interest rates by 0.5% to 3.5% on the back of their 0.75% rise in November.

As we know, data varies depending on the reporter. Halifax, the country’s largest mortgage lender, released data that showed an annual rise of 4.7% between January-November. Director of Mortgages Kim Kinnaird commented, “Property prices are up more than £12,000 compared to this time last year, and well above pre-pandemic levels.” Whilst Rightmove’s figures showed asking prices up 5.6% on last year.

The biggest gains, of course, have been in the rental market where we have seen unprecedented growth; the demand for rental homes jumping by a quarter in the year. The present conditions in the London rental market have been described as “extraordinary” with record levels of renters entering the market. We saw increases in rental prices of 6% in Central London and Manchester and 5% for Birmingham in 2022 - all key locations for RPA investors and tipping the UK ever-more towards being a majority tenanted property market. In 2003 the UK homeownership rate was 70.3%, in 2022 it is 65%; a figure that drops to 30% amongst the millennial and younger generation age categories.