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Featured - ISA allowance
What is the 2024/25 ISA allowance?A new tax-year means a refreshed ISA allowance to allocate. Find out more about the 2024/25 ISA allowance...
Savings
ISAs
Mortgages
Buy to let
Specialist mortgages
Featured - Debt and your credit score
How debt impacts your credit scoreA healthy credit score has its benefits, so make sure you manage your debt correctly.
Loans
Featured - travel insurance
Travel insurance 2024Discover the best travel insurance policy for your next trip.
Home & vehicle
Health & travel
Featured - High interest current accounts
Find current accounts offering in-credit interest rates up to 5.00% AER.
Current accounts
Featured - Purchase Cards
Best purchase credit cardsExplore the best cards with a 0% introductory period.
Credit cards
Credit repair
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Featured - The triple lock explained
Could the value of your state pension rise by more than inflation?
Retirement
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Business insurance
How much can I give as a cash gift?
How much can I give as a cash gift?Will your loved one's gift be tax affected?
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Bad news for potential buyers as the average house price rose by £27,000 last year.
The latest UK House Price Index recorded average house prices up 10.8% in the year to December 2021. According to data from the Land Registry, it is the biggest gain in a calendar year since 2002.
This means the average UK home is now priced at £274,712, with property remaining the most expensive in England at an average of £293,339.
Conversely, Northern Ireland remains the cheapest place to purchase property in the United Kingdom, with the average house price at £159,000.
“House price growth was strongest in Wales where prices increased by 13.0% in the year to December 2021. The lowest annual growth was in London, where prices increased by 5.5% in the year to December 2021,” the Government said in a statement.
With inflation still on the rise, pressure will grow on the Bank of England to raise interest rates once again. Coupled with rising house prices, this can make it more expensive for first-time buyers to own their first home.
“Those hoping to take their first step onto the property ladder may understandably feel a little disheartened as the cost of living and house prices continue to soar,” said Eleanor Williams, Finance Expert at Moneyfacts.
However, she encouraged potential first-time buyers to start saving towards a deposit for their property.
“Speaking with a broker or qualified adviser may be extremely beneficial in calculating how much they may be able to borrow and gaining support in navigating an ever-changing landscape and the mortgage options available to them.”
Although mortgage rates have been increasing overall of late, average rates at a 95% loan-to-value ratio – a sector often favoured by first-time buyers with limited deposits – have fallen recently.
Our recent data shows that the average rate for a two-year fixed-rate mortgage at 95% loan to value ratio stood at 3.69% in August last year, today it stands at 3.05%. Likewise, the average rate for a five-year fixed-rate mortgage at 95% loan to value ratio was 3.93% for August, but now stands at 3.35%.
“Both the average two- and five-year fixed rates have fallen notably over the past six months and there are plenty of competitive products available for would-be borrowers to consider,” said Williams.
Homeowners over the age of 55, however, could consider using their home for equity release. With rising house prices, you can get more money out of your house than you anticipated.
Still, deciding whether to use equity release on your property depends on your individual circumstances. Unlocking too much equity release could result in leaving a significantly lower inheritance behind than intended if house prices crash.
Some experts are predicting house prices will fall later this year, which will make the decision to use equity release more significant. If you are considering releasing equity from your property, we recommend you speak to an equity release broker who will find the best deal for you.
In a separate study released by the Office for National Statistics, rent rose 2% in the 12 months to January 2022. Excluding London, rent across the UK rose 3%.
This may come across as good news for landlords who have also benefited from an increased level of product choice for buy-to-let mortgages, according to our data.
“After a rise of 222 products month-on-month, the year began with 3,528 total products on offer to landlords, the highest number seen on our records since September 2007,” said Williams.
She also referred to data from Zoopla, which indicated that rental demand grew to a 13-year high in the third quarter of 2021.
“While demand for property continues to outstrip supply, it also recorded an increase in average UK rents of 4.6% over the year, so there may be those considering investing in the sector,” said Williams.
Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfactscompare.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.
The Moneyfacts Pick of the Week showcases the best of the latest products or rate changes to hit the consumer finance market.
This week's selection includes a five-year bond from GB Bank and a two-year fixed rate mortgage from first direct.
Each week the Moneyfactscompare.co.uk content team round up the very best mortgage rates available in the UK. Compare and apply today.
Many of the lowest mortgage rates drop as the first sub-4% mortgage deal since April appears on the market.
Nationwide BS has reduced mortgage rates across its two-, three- and five-year fixed products by up to 0.25 percentage points.
Nationwide BS has reduced mortgage rates across its two-, three- and five-year fixed products by up to 0.25 percentage points.
The Moneyfacts Pick of the Week showcases the best of the latest products or rate changes to hit the consumer finance market.
This week's selection includes a five-year bond from GB Bank and a two-year fixed rate mortgage from first direct.
Each week the Moneyfactscompare.co.uk content team round up the very best mortgage rates available in the UK. Compare and apply today.
Many of the lowest mortgage rates drop as the first sub-4% mortgage deal since April appears on the market.
Nationwide BS has reduced mortgage rates across its two-, three- and five-year fixed products by up to 0.25 percentage points.
Nationwide BS has reduced mortgage rates across its two-, three- and five-year fixed products by up to 0.25 percentage points.
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Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.