The East of England continued to experience an increase in average house prices. Cambridge is one of the cities in the UK. It is witnessing this increase in house prices that is expected to escalate in the next five years. It is not that easy to get on the property ladder today as house prices continue to rocket across the different UK cities.
In the next five years, the average house prices in the East of England, Cambridge included, is expected to grow by 10.4%. The current figures from estate agents like Savills predict an increase in the average house prices to rise to £420,276 by 2026 compared to the current average, which is £380,685.
The figures above may seem to be high. However, they are not as high as the current average house price in Cambridge which is £524,844. This has been the average housing price in this city over the last year.
The current forecast for the whole UK is 13.1%, and this means that Cambridge’s house price increase is slightly lower than the whole UK average. The average house price is expected to increase by at least 3.5% for most UK cities in 2022. The house prices in the Cambridge region are still higher than the national average. This increase is slowly raising the UK average from £327,838 to £370,785 by 2026.
Before investing your money on any property, you should always take expert legal advice from conveyancing solicitors in Cambridge. For instance, AVRillo is a top conveyancing solicitor covering all of London and major areas of the UK.
Cambridge is the new stop for buy to let investors
“We can anticipate that there will be less urgency in 2022 after experiencing such intensity in the market without the imperative of the Stamp Duty holiday that expired in September 2021,” said Ed Meyer, the head of residential sales at Savills Cambridge.
Researchers are expecting price growth in the near term to be a bit low due to an interest rate rise. We should also expect to see a softer growth in housing prices rather than a decrease since the number of new homes entering the market has been constrained.
Other factors that are more likely to contribute to this scenario are the low employment rates witnessed in the pre-pandemic period and a robust economic performance just after the recession.
Also, it is worth noting that the East of England has been experiencing an above-average increase in house prices for the past decade or more. It is no surprise to see other cities and parts of the UK following suit.
“The regional increase in house prices we predict remains greater than what is being forecasted in London. The demand for housing is likely to be undermined by the changes in working patterns. This will happen to a lesser degree than what we have been witnessing for the last 18 months or so,” added Meyer.
Cambridge will continue remaining one of the UK’s favorite hotspots for buy to let investors and private rental buyers. The existence of a variety of high-quality housing stock, connectivity of this city to London, and the access to green space and the open countryside are some factors that position Cambridge as the best place to invest in the housing market.
Homes in the most popular towns and villages will continue to be in high demand as there is still a shortage of available housing properties in the current market. The average house prices in Cambridge and its neighborhoods have increased by at least 7.7% in the last year.
The average house price in the city now stands at £529,431. This figure is way above the national average. There will always be a part of the UK that bucks the trend and experiences a higher housing price than what researchers are forecasting. However, investors will have to set a more realistic asking price to maintain the market momentum.
What makes Cambridge stand out from other cities in housing?
Cambridge has always been a city looking for the future. This city currently has some of the cheapest houses compared to other cities like Oxford and London. However, the price growth is expected to increase soon. These are some of the reasons why house prices are expected to escalate in the coming years:
- The employment rate is likely to increase in the city.
- More homes are being built to meet the increasing demand for private rentals.
- At least 14,000 homes have been planned for Cambridge by 2031 and 19,000 more homes in South Cambridgeshire.
It is normal that when the supply of homes increases, there should be a decrease in prices. However, this is not likely to be the case in Cambridge. The demand for housing in the city will increase due to the new developments making the city more desirable for commuting.
What it means for those intending to purchase homes in 2022
In the last quarter of 2021, the property prices in the country have shocked even some of the key players. While everyone was more focused on the economic impacts of the pandemic, other factors seem to have taken a toll on the housing market in the UK.
The steady increase in house prices in Cambridge and most major cities in the UK means a lot. With the underlying economic risks like the Covid restriction and increasing mortgage applications, the market is likely to focus most on low-risk players. It means buy to let investors are likely to be the major beneficiaries of mortgage applications instead of first-time home buyers.
Also, as lifestyle priorities keep changing, not all types of property will fare the same within the forecasted period. For example, family housing with plenty of outside space is more likely to perform better than smaller flats or units in the short term. Prime properties are expected to perform better in the future. This market has been the most steady of late.
The unemployment rate is expected to fall in 2022 as the economy recovers from the impact of the Covid pandemic. This will limit the potential for house price falls in the future. The mortgage rates will be more affordable for new home buyers as the Bank of England sets a new base rate to lower the interest rates.