REAL estate company Zoopla released new figures which shows demand for homes remains 25 per cent above the average over the last five years. 

In the UK House Price Index for June 2022, overall figures show there was an 8.3 per cent growth in UK house prices, a projected sales volume of £1.3 million in 2022, and a five per cent projected house price inflation by the end of 2022.

Richard Donnell, Research Director, said: "A lack of any major over-valuation of UK housing - thanks to mortgage regulation - means the market is in much better shape to weather the economic challenges ahead than in previous economic cycles, but it's not immune."

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Newcastle had a 5.7 per cent increase in annual change in house prices. The North East region saw a rise of 7.1 per cent.

Zak McCready from Red Hot Sales and Lettings in Hexham said he thinks the increase in prices is down to limited supply, leading to huge demand.

He added the market is slightly slowing down and hopes it levels out rather than crashing, but the market is hard to predict.

Zoopla's index said levels of demand remain on par with levels this time last year.

Working from home is continuing to influence the housing market. Zoopla found homeworkers are five times more likely to move than those expecting no changes to their working pattern.

Retiring households with excess space may be motivated to move by the cost of living and their reduced income, meaning they are struggling to afford running their current home - which could equally apply to non-retiring households.

Mortgage rates have increased to around 3.5 per cent from lows of -2, and are predicted to rise higher to four per cent, reflecting rates from 2013 to 2015.

Zak said he has seen people stretch more than they should in their bid to buy a house, as they try to borrow more loans from family and lend more from banks.

He said because wages are not increasing alongside prices, it's hard to keep up. 

"I'm hoping it levels out, I hope to get to a point where demand comes down.

"Inflation is natural, with Brexit and elections everything is up in the air and people are nervous, and then the banks become nervous.

But he says he doesn't want people to avoid buying a house. "It's still a decision to buy. The rental market has gone absolutely crazy and skyrocketed.

"The sale or rental market is crazy, but it's still investing into something. Don't overlend beyond your means, but move forward if you can," he said.