House prices rise fastest in 17 years – don’t get burned by an overheated market
Sarah Coles, personal finance analyst at Hargreaves Lansdown, comments on Nationwide’s publication of its House Price Index, which shows house prices rise fastest in 17 years in overheated market.
Key points from report:
- House prices were up 2.1% in a month – the highest monthly increase in 17 years – and 7.1% over the year.
- This is despite the fact that Nationwide’s House Price index jumped the previous April (way above the ONS house price index), so we’re comparing it to a blip in April 2020.
- The average price reached a record high of £238,831, up £15,916 over the previous 12 months
Sarah Coles comments:
“The extension of the stamp duty holiday in March lit a fire under buyers. Unfortunately it had less of an impact on sellers, who don’t feel they have long enough to go through the entire process of selling and buying before the end of June, so many of them are sitting this one out. It means estate agents are burning through their stock, and the market is red hot.
“Nationwide says that if house prices remained flat until June, comparisons to a dull summer last year would still mean double-digit growth. And given the forces at play in the market, it’s highly unlikely that prices are going anywhere but up in the immediate future.
“This kind of market can be very dangerous for buyers. It’s easy to start to panic about how fast properties are being snapped up, and be sucked into bidding wars that leave you overpaying for the property. With unemployment expected to rise later in the year, when the furlough scheme draws to a close, the autumn and winter is much more uncertain. There are no guarantees that the market will continue its steep climb.
“If you’re buying at the moment, take some time to think things through. You can’t control the housing market, but you can control your own actions. You can make sure you don’t overstretch yourself, and be certain that you’ll still be happy with a purchase even once the market has cooled – even if your home falls in value for a while. It’s difficult to keep your cool when the market is this hot, but it’s the best way to ensure you don’t get burned.”
Kindly shared by Hargreaves Lansdown
Main photo courtesy of Pixabay
