Homes across the UK soar by as much as 20% in 5 years!

  • Nov 22nd 2021

The average value of a property in the UK has risen by as much as 20% in the last 5 years, with an average price increase of £49,000 since 2016. This is a staggering increase of £1.6 trillion since 2016, giving the property market a value of four times the UK’s GDP of £9.2 trillion!

Many factors have led to the increase in property prices since 2016 and through the pandemic. Low mortgage rates since 2016 have been a significant contribution, especially with interest rates at an all-time low before the start of the pandemic. After the Chancellor opened the property market by introducing the Stamp Duty Holiday, mortgage rates remained low, with more products aimed at existing homeowners rather than first-time buyers, who led the market share in property sales before the pandemic.

The Stamp Duty Holiday has meant that the property market has thrived, seeing many existing homeowners using their equity to upgrade into a new home to accommodate their family’s needs after the first national lockdown. 

This has also caused a shortage of available properties on the market, fuelling the property price increase. Properties coming onto the market are being sold much quicker than before, with many agents seeing properties sold within 14 days and above the asking price. Some agents have seen properties sold within 24 hours! 

Since the introduction of the 95% government-backed mortgage by the Chancellor and the new Help-To-Buy Scheme, first-time buyers started to gain market share from existing homeowners since the pandemic started. Lenders began to re-introduce mortgage products for first-time buyers. 

Landlords have also been investing in properties, with many deals agreed off the market, where agents market properties to existing landlords and not the wider public. The rise in property prices has also seen an increase in rental fees to accommodate the average yield that Landlords are looking for. 

Certain areas of the country are seeing a much higher increase in price, such as Liverpool, some Northern areas, including the East of the country. In Leicester, we continue to see a strong trend when we look past the 5-year mark and expect this to carry on for the foreseeable future. Developers are continuing to invest in Leicester with new builds and specific rental developments taking place in the city. These city developments aim at the rental market, offering luxury accommodation to those who want to rent in the city. 

Although the government is pushing for growth in the first-time buyer market, many look at renting as a better option, favouring these luxury developments. This is due to many factors. New graduates who have been living in lavish student accommodation will want to carry on with the same lifestyle. Some prefer not to keep chasing for a deposit with property prices continuing on the rise, in order to attract a better mortgage rate. 

According to Rightmove, the average property price in Leicester is £256,750, meaning that a first-time buyer would need to save £64,187.50 to have a 25% deposit. In 2017 the average property price in Leicester stood at £197,703, meaning that a first-time buyer would need to save £49,425.75 to have a 25% deposit. 

Although there are several schemes for first-time buyers, including the 95% government-backed mortgage and the Help-To-Buy Scheme, specific criteria must be met. For those who want to live in luxury accommodation but don’t want to compromise on their living arrangements, either by not having the suitable deposit saved or meeting the eligibility criteria for the available schemes, these luxury rental properties are preferred. 

With more retail space being converted into high-end rental properties, this new style of renting is becoming popular.

Overall the property market has seen a significant return over the last 5 years, especially since the Stamp Duty Holiday announcement by the Chancellor. Going forward, this trend is expected to continue due to the shortage of properties available on the market vs buyer demand. 


If you are looking to sell your property, speak with our dedicated sales team today by calling 0116 266 9977!