The start of a new year offers what feels like an unprecedented time to make a definitive change to our lives- in whichever aspect of our lives we choose to change. Living in a post-pandemic society, our goals and desires have more often than not begun to change, and what we wanted two years ago is definitely not the same as the accomplishments we wish to achieve now. Being confined to our homes for the best part of eighteen months throughout the Covid-19 pandemic has made a lot of people think about property- whether they own, rent or live with parents at the family home, the likelihood is, is that most people have assessed their own living situation and decided 2022 is the year for change. House prices throughout the pandemic soared as the demand increased, however as of 2022, the Uk government, property specialists and financial experts have reassured the nation that the playing field is to even out and the property market is set to boom and make becoming a homeowner a lot easier. However, not even two months into the new year, media and expert sources admit we are facing a crisis, and the UK housing boom is set to fade rapidly. Here at We Buy Any House, we have decided to delve into the issue- and answer the question: is the UK housing financial crisis making owning a home impossible? 

What Happened to House Prices in January? 

According to Halifax, house prices in January 2022 reached a staggering all-time high. The average house price stood at £276,759- which is an astounding increase of over £24,500- and in comparison, to two years ago, £37,500 higher. However, the dramatic increase has been caused by the pandemic-fueled boom, in which the sudden demand to be a homeowner skyrocketed. Now that that sudden demand and boom is set to end, house price growth is set to slow down- which is evident in January’s results, which saw a 0.3% growth. 

How Will the Rise in Cost of Living Affect the UK Property Market? 

Since the beginning of 2021, the cost of living has been on an increase. Although it has been occurring slowly, the impacts on everyday life have been felt by people across the country. In mid-December 2021 the cost of living and inflation in the UK reached its highest peak in decades- which dramatically affected the public's ability to afford goods and services. Throughout the month of December, it was proposed by the Bank of England that the CPI inflation rate was forecasted to remain above 5%, however, it would be rising to around 6% in April 2022. Although the statistic stands at 6%, experts have at the Bank of England have forecasted the CPI inflation rate to rise to 7¼% in April 2022, which will have dramatically negative effects on people across the nation. 

 

 

 

 

 

 

 

Energy Prices: 

A huge part of the rise in inflation costs surrounds energy prices. Throughout eleven months of last year, from January to November, domestic gas prices rose by 28%, alongside domestic electricity prices, which rose by 19%. Hopefully this will be the end of rising energy prices- as it's already at a price at which most households struggle to afford, sadly, on the 3rd February 2022, Ofgem released a statement which announced that the cap would see another increase of 54%- which means that the equivalent annual price would rise from £1,277 to £1,971. 

Food Prices: 

A staple of life, the gradual increase of food and drink prices has creeped upon us, and once upon a time where “luxury” items such as cheese, wine and meats were affordable- they now seem to be inaccessible to the everyday person. Inflations such as the sugar tax implemented by the government have somewhat spearheaded a drive to inflate the costs of food and drink prices- and although the price of food and non-alcoholic drinks increased by 4.2% last December, they are set to rise further in the coming months. 

Benefit and Tax Charges: 

Alongside higher inflation, the governments implemented benefit and tax charges on households will inevitably make either purchasing or maintaining the ownership of a home even more difficult. As of April 2022, National Insurance contributions could rise dramatically, and in addition to the withdrawal of the £20 Universal Credit uplift, a lot of people are set to face financial hardship.  

 

49% of Brits consider themselves as working class. 36% of Brits consider themselves as middle class, and only 1% of Brits would consider themselves as upper class. Those who have ordinary jobs, come from a working-class background and don’t have excess savings to rely on are set to be detrimentally impacted by the continuous crisis of the UK economy and financial burden which is set upon them. Whether an individual is opting to own a home as a prospective buyer, or they are paying off a mortgage- the increase in all areas of everyday living is bound to have consequentially negative effects upon the UK housing market and individuals across the country. The cost of housing has risen astronomically in comparison to average wages across the UK- and it seems as though generational wealth, or, saving up until you are mid to late 30s, are the only solutions as the UK faces another financial crisis. 

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