Property Prices Rise by 0.9% in January

Why have Prices Risen?

As a result of the supply-demand imbalance, the need for properties remains higher than at pre-pandemic levels. Therefore, property prices are unlikely to drop. Furthermore, it appears the initial shock of the September mini-budget has subsided and buyers are less anxious about securing their next property.

Although interest rates rose, they have started to decline again, as lenders have had time to assess the risk of lending. The drop in interest rates has brought forward a lot of serious buyers and encouraged homeowners to get their property valued. In fact, Rightmove reported an impressive 55% higher volume of enquiries.

What Does This Mean for Investors?

For investors looking for capital gain throughout 2023, this is a positive sign. While a 0.9% price may not sound substantial if this growth continues it could result in a 10.8% year-on-year increase. If a property is currently valued at £200,000 that could mean an extra £20,000 of capital appreciation over one year. While this is not a matter of fact, in 2022 house prices across the UK raised by 8.2% on average.

However, some investors will be looking to benefit from the high rental demand. This is achievable as potential first-time buyers are currently priced out of the market. This leaves many people looking for high-quality rental accommodation. Therefore, rental prices will continue to climb throughout the year.