How much have house prices gone up since 2021?

[sumesest]

I’ve found a beautiful house online; they are marketing it for OIEO £800k. From what I can see, all they’ve done since moving in during 2021 is redecorated (paint), changed flooring to herringbone, swapped the kitchen worktops from wood to Quartz, and added an outdoor kitchen (which isn’t included in the sale anyway). They paid £630k for the house in 2021.

As I said, it’s a really gorgeous home, but am I wrong for thinking they are batshit wanting a 33% increase over what they paid?! Or am I out of touch? I was under the impression that prices had gone up max 15% in the last 5 years, at a push.

So add in £25k stamp duty, solicitor fees buying and selling the agent commission now, these sellers will most likely be loosing money.

My concern would be selling twice in 5 years and what is wrong with it/area. Could simply be mortgage rate increase and it’s become unaffordable. Either way they are bailing out and certainly not profiteering in the way your original post implied.

Have the average salary gone up 24% since 2021 either, and mortgage rates stayed at 1%?
People will not be able to magically afford to pay 24% more for the house because of inflation, quite the opposite actually.

It depends on your area. I many areas, prices for the more expensive, detached houses peaked in 2022-23, particularly London and most of the South of the country. In other areas and for other types of house, the increases continued into 2024.
You can look on ottaproperty.co.uk. https://ottaproperty.co.uk/trends
It records data directly from the Land Registry. Look at trends, select by area and type of property. For detached houses, there are falls from peak of around 30% in N London. On the other hand, some areas eg Bradford, Huddersfield and Coventry prices haven't really dropped. For detached houses, Manchester is down a fraction (3.1%) but the overall falls are negligible (0.3%).

To answer your question, the chances are high that it is now worth less than it sold for in 2023. Why not keep an eye to see if it sells and you can update the thread to let us know the final price (if it does sell at all).

Depends on the area but I agree, in all but the hottest markets, that sounds like a big jump during a period where in many places prices have stagnated

I've told this story previously....

We bought our current house (a Georgian cottage in a seaside conservation area, in a street with lots of different property sizes/ages/values) in Sept 2024.

Prior to that - in 2022 - a neighbour who we're now friends with sold their 1990s three storey townhouse for 425k. They love the street/location so moved a few doors down to a early Victorian house for which they paid in excess of 700k.

The townhouse was purchased by an investor who - having made zero changes except ruining the mature garden by decking it - let it out as an Airbnb for a couple of years. Then, sometime in 2024 they decided to sell, marketing it at around 500k. We noticed it for sale when we were looking but ruled it out as we wanted a period property. They appeared to give up for a while, then - after we'd bought ours, so late 2024, it came back on at 450k. The price was dropped incrementally over the following months till it eventually sold in Spring this year for 325k!

If you look at the BoE inflation calculator £630,000 in 2021 was worth £747,000 in 2023 and £802,00 today.

The house hasn’t increased in price above inflation.

Well the answer according to Google is average 20-25% since 2021. The house in question is asking for OIRO a 27% increase.
So not that odd. But it’s all in the detail.
I am surprised at the average increase. I am in SE and prices seem around the same as 2022 when I last bought. So have fallen a lot vs inflation.

Yes, they are batshit, move on, are you using price tracking apps to monitor asking price drops?

Do you have the stats for sales volumes?

The cost of debt has gone up though, loads of people use debt to purchase their house.

We bought a house for £600k in 2019
Needed masses of work
Listed
They hadn’t been able to sell for two years
because of work needed and the surrounding barns in a state.

With the surrounding barns renovated, at no cost to us, and our house also complete the immediate uplift is £1mill min (it’s 500m2 in one acre in the South East, edge of town, countryside, excellent links ) and it’s still a bargain for the area.

A spend of £200k by us but a much bigger spend on the barns needed

Sometimes its relevant to concider not just what someone paid and searching for what you think Theyve done but also
Necessary to consider the surrounding areas and how long it was up for sale in the past
There’s also a smaller pool of people even willing to pick up a paintbrush

The increase is slightly lower than inflation. In real terms the price has come down a tiny bit.

I find the total lack of understanding of basic economics more alarming.

Exactly, inflation eats into people"s purchasing power, and eventually raises debt costs (mortgages)

When did you sell it?

We’ve just had a valuation
but the barns have another 6 months to complete which will also incorporate the drive that runs through
The valuation is based on whats here now ie
scaffolded barns and a dirt and weed drive
Plus we haven’t got the original kitchen sorted yet ( it’s literally still a room ie the four walls, no fittings and with the ceiling on the floor ) so all the valuers stated it was a low valuation because of existing factors
We didn’t ask for a valuation based on the potential

A house is worth what someone is willing to pay for it at the time it’s on the market. Right place, right time. Not weird at all that the current owners would put it on for £800k.

Indeed borrowing costs have gone up, but in the case of the property in question it doesn't appear to have affected the optimism of the asking price.

Sustained high interest rates, will slow the volume, and eventually perhaps the prices as has happened historically.

Supply
With new house building down 50% (year on year to mid '26), and Labour's plan to build 1.5M homes in tatters (and ignoring AB's "promise" to increase council house building by X 75)

Demand
The biggest driver of demand has been the 2.5 million population growth since 2021, without the commensurate increase in supply and this looks like it will continue.

I don't think we'll see a major correction without there being some form of economic "incident" first...

However, there is a significant cooling in £3M+ end of the market, largely due to the wealth exodus, as is also reflected in the sports car market, (e.g. Ferrari UK registrations are down 44% this year.)

One might not care, but these are the very people who invest in the UK, and they are leaving in droves.

I'd counter that the biggest impact on demand has been availability of credit. Too much credit made available too easily.

I agreed. Many fewer buyers at the moment

I would disagree, as does the relationship between house prices and interest rates.

Demand is down, immigration is collapsing, mortgage debt costs are going up, and no one viewing a house to buy is homeless, perfect storm IMO.

https://www.statista.com/statistics/290623/uk-housing-market-monthly-sales-volumes/

The "incident" is unfolding as we type. Add in AB as new PM and things could get interesting for mortgage debt costs.

https://www.mirror.co.uk/news/world-news/iran-strait-hormuz-donald-trump-37448226

I can’t read the mirror article but I am aware
Iran made that statement back in early March and since then oil has been allowed to pass

No idea if they’ve made it again as mirror behind paywall and can’t see a similar report in any other news

https://www.msn.com/en-gb/news/world/deadlock-in-the-strait-of-hormuz-shipping-traffic-collapses-in-a-week/ar-AA282COX

Thanks very much
I never look at msn so good shout

Can’t see that quote by Iran though
No idea how much oil the US may be sneaking through if in fact they are
10 tankers officially transited in the last 24hours
A lot lot less than normal
The Houthi’s have threatened to close the Red Sea oil route
Ceasefire collapsed
So yes very little oil will get through in a war zone

All seriously affecting the global economy