With the recent tax cut announcements and the turmoil caused by the weakening of the pound, what’s happening to property prices in Leicester?

To prevent the housing market from collapsing during the pandemic, the previous Chancellor introduced the Stamp Duty Holiday tax break, which caused the property market to boom, with demand outstripping stock.

Property prices rose at an all-time high, and lenders felt more confident to lend during this surge. As with any gain, there is a cooling period, which is where the housing market is heading.

With house prices growing at a staggering rate over the last two years, and some areas seeing 10 years of growth during these two years, it's expected that property prices will start to taper as they are now.

The average property price in the UK is £258,000, however, it's worth noting that this does vary considerably across the country. For example, in Kensington, the average property price is almost five times the national average, whereas, in East Ayrshire, the average property price is less than half the UK average.

The most expensive properties can be found in parts of London, such as Kensington and Chelsea, which are at the top of the table. Although property prices have risen by as much as 2% in these areas, this minor increase in an expensive property means a big jump in the overall property price.

In Leicester, the average property price is £256,227, with an average increase of 15% since the peak of 2019 when the average price in Leicester was £221,935.

The majority of properties sold over the last 12 months were semi-detached, with an average value of £254,329. Detached properties fetched an average of £385,751, and terraced properties fetched an average value of £211,204.

Property prices in Leicester vary considerably by postcode, with some areas fetching an average above the national average.

Below is a table of the average property price by postcode:

LE1: £140,327

LE2: £281,910

LE3: £258,357

LE4: £277,497

LE5: £295,630

LE6: £325,579

LE7: £357,659

Below is a table of the average property price FOR SALE by postcode:

LE1: £169,273

LE2: £305,246

LE3: £282,849

LE4: £296,916

LE5: £346,242

LE6: £421,832

LE7: £447,384

Although the market is cooling off, properties in Leicester are being marketed above the current average by postcode. We don’t expect property prices to increase dramatically in the near future, however, property prices in Leicester are expected to increase at a modest rate.

Stock levels are starting to balance out with buyer demand, which in turn will slow down the growth in property prices. The government’s tax cuts are still causing inflation to rise, and with the continued rate rise by the Bank of England to combat inflation, mortgage rates are set to continue to increase, making it more difficult for those looking to purchase with a mortgage.

It's expected the continued rise in mortgage rates and the increase in the cost of living has pushed back many first-time buyers by as much as two years. For existing homeowners looking to buy a new property, a revisit into their finances will most likely be needed, especially for those looking to upgrade to a larger property and a larger mortgage.

Although, it is worth adding that on average, 25% of property sales involve no mortgage.

Overall, the property market is expected to slow down. It is uncertain how the new tax cut measures will implicate property prices over the long term due to the government's continued efforts to combat inflation and fight against the devaluing pound. But for now, we still expect property prices to remain stable with a modest increase.