Property price boom – what it means for you

The headlines are full of news about property prices hitting an all-time high – but what does that mean for you?

Well, if you are happily settled in your home with no plans to move, it means very little, except that the value of your home may be going up.

If you are selling a property, you may get a better price – though of course you may well end up paying more for the next property you buy.

But if you are a first-time buyer then things might be a bit more complicated.

House prices rose by 2% in August – the biggest monthly rise in 16 years, and Nationwide says the average house is now worth £224,123.

That means that the price of getting a house in the first place could be higher, meaning a headache for those looking to take their first steps up the property ladder.

The price boom has been fuelled by a return to people wanting to buy homes, a demand that has been supressed during the coronavirus lockdown.

Of course, there is a huge amount of uncertainty around – coronavirus has made sure of that. For instance, there is no sign of lenders responding by making it easier to get a mortgage and buy that first home. Lenders still appear nervous.

There are still very few prepared to lend to people who have only a small deposit. We need to see all the main lenders start offering first-time buyers the chance to borrow with just a 10% deposit. Then we will see the mortgage market really start to move again.

If not, there is a real risk that the whole housing market will come to a halt, because the lower end is stagnant.

And if, as some are predicting, the price boom bubble bursts quite quickly and prices fall back a little, we could see people sitting on negative equity – where the property is worth less than the mortgage you took out on it.

It is going to take some time for the housing and mortgage market to really settle down again, especially if there is a second wave of coronavirus this winter.

As always, buying a home is a big decision and one that should be taken with the best advice.

I am fortunate enough to be able to access mortgage deals from the whole of the market, including many that are only available to brokers.

For a free, no obligation discussion on this or any other mortgage or insurance-related issue, please give me a call on 01723 384558 or 07767 692 653 or email me at

Leave a Reply