Property prices - home values predicted to rise by £14,000

A new market analysis from Benham and Reeves shows that property prices remain on the incline. The lettings and estate agent based in London forecast a further 5% increase before the year ends. 

The property market is undergoing much difficulty due to interest rates at an all-time high and the cost of living crisis putting pressure on businesses, homeowners, and tenants.

Although an increase in home values is good news to those hoping to sell up, a reduction in buyer demand could cause the market to slow down.  

Regional property price insight

Benham and Reeves estimate that this 5% increase will add a further £14,320 to the average property value. Overall, this will increase the average property value up to £300,717.

On a regional scale, London property prices are predicted to increase by £26,896. This will shift property price values from £518,028 at the start of the year to £564,816 at the end of the year.

The London borough estimated to have the highest increase is Kensington & Chelsea (£68,103), followed by Westminster (£47,222), the City of London (£41,519), and Camden (£41,493).

Benham and Reeves also estimate that major price hikes will occur in the South East as a £19,526 boost will bring the average price to £410,039. Other areas predicted to experience some of the largest increases include the East of England (£17,724), the South West (£16,116), West Midlands (£12,306), and East Midlands (£12,296). 

Director of Benham and Reeves, Marc von Grundherr, commented: “We keep waiting for house prices to plateau, but it’s just not happening. The pandemic-inspired boom in demand and value has supercharged the housing market to such an extent that it seems even a cost of living crisis and soaring interest rates can’t stop it in its tracks.

"So much so that house prices are likely to keep on climbing as the year plays out and in some areas, this will equate to quite a significant increase in property values. 

“As for if and when prices will finally fall - it’s hard to predict. But if this coming winter is going to be as tough as most are suggesting it will be, we might find that moving home is pushed to the very bottom of most people’s to-do lists and property values might, therefore, start to decline.”