The UK housing market has been in rapid movement upwards for a long time and during a time when it was unexpected. The global pandemic had been expected to slow down most markets, including property buying. However, it sparked strong demand from home buyers. First time buyers and home movers were buying rapidly and in markets that had received little attention such as those in the country due to buyers seeking property with more space. 

The rush for buying properties with more space was dubbed the Race for Space. Home buyers were seeking more area for living indoors during lockdowns that allowed for working, studying, getting fit, entertainment, and cooking more often than usual at home. They were also seeking to find more outdoor green space for families and pets to be safely outside during a time when communities were warned and anxious due to the Covid pandemic.

With increased demand and restrictions causing a slowdown in building and repairing properties, supply quickly dwindled and asking prices soared. The average house price has therefore risen to record highs many times. 

The rising house prices are likely putting the ability to climb onto the property ladder out of reach of many first time buyers. 

In addition to higher asking prices for UK homes, first time buyers are also facing borrowing that has grown more expensive in just the last few months and it is expected to continue to do so. The Bank of England’s Monetary Policy Committee (MPC) has increased the standard base interest rate in each of the last three consecutive meetings in December 2021, and February and March. The Bank’s rate has gone from 0.1% to 0.75% in those few months. 

Lending is also starting to get more restrictive as lenders see the economy causing financial strains and more risk in lending to borrowers that may be strained in repaying debt. This more reserved environment in lending could result in borrowing to not only be more expensive but harder to obtain. 

There are many factors that are causing obstacles for home buyers, but recent reports have brought some good news. Supply appears to be growing, and with even a slight amount of growth it could help. According to one report, there has been a growth in supply to the housing market for the first time in the last twelve months. Continual increase in supply of properties could help to bring down asking prices.

It is a difficult housing market for home buyers and especially first time buyers. However, many are finding creative ways to make their dreams of becoming a home buyer come true including borrowing deposits from parents. Some may be taking on projects to get into a home that might not be their dream home yet, others could be taking on a longer commute, while some may be holding off from buying now for a more buyer friendly market in the future.

Experts have warned that more interest rate hikes could occur and as possible as the next MPC meeting on 5 May. House prices also may continue to break records as the demand has yet to cool off, but it is expected by end of year. Yet, the housing market could also continue to surprise as it has been doing, and that is surely a possibility.