Bank of England

Cost of Living and House Price Growth

Earlier this month, the headlines were dominated by the energy price hike followed swiftly by the Bank of England’s announcement that they were doubling the base rate from 0.25% – 0.5%. While for many people the base rate rise could be beneficial when it comes to interest on savings, for the majority of the UK, however, it spells an increase in their mortgage payments is on the horizon.

If you’re in a position to be thinking of moving to this area this year, take some time to browse our properties for sale in Virginia Water and the surrounding areas. If you have any questions, you can also visit our award-winning website or call us on 01344 843000 and email us.

House Prices

According to the major lenders, January saw property prices in the UK reach a record high, however, with the recent rises in the cost of living this growth is likely to slow, especially once the energy price hikes land in April.

The price of the average home in the UK reached a record of £276,759 in January – a full £37,500 higher than this time two years ago. The limited supply of new homes to the market has been fuelling a post-pandemic boom with sellers securing good prices for their homes many of whom have moved into rented accommodation in order to wait for the right home or for house prices to dip.


The rate of inflation is currently running at a 30 year high of 5.4% and, many finance experts expect this to increase throughout the year. The Bank of England raising the base rate was an effort to temper inflation; by raising the rate, they are actively discouraging borrowing while promoting saving and this tends to slow the economy down and decrease inflation.

Affordability remains at record low levels as price rises continue to outstrip any growth in peoples’ earnings, and homeowners are set to face more dramatic price increases in their cost of living through the rest of 2022 and beyond.

Home Finances

The energy price cap will be lifted in April (2022) and this will see a rise in energy costs of around 54%; this means that the average energy cost (across the UK) for a home will rise from £1,277 to £1,971 per year, an increase of £694. Add to this, the Brexit-fuelled increase in cost of food bills and further rises in phone and broadband costs, and households are likely to feel their financial situation slightly less comfortable than in previous times.

Since 2014 new affordability criteria have been applied to borrowers looking for mortgages, these criteria have essentially been a stress test to ensure that your existing household income can cope with interest rises in the region of 6-7%, so this base rate increase may feel uncomfortable, but for most people, it will be manageable.


One of the key issues in buying a home is the size of your deposit. Last year we saw a record number of first-time buyers who still had to overcome significant hurdles to homeownership, the primary one being the amount f deposit they’re able to put down. Those with large deposits will be able to cope easily with the rising living and mortgage costs, those saving for their deposits will find it harder to save as rents and general living costs increase – this could be key to house price inflation this year.

The Virginia Water Effect

The general cost of living across the UK is rising and is likely to impact young homeowners and those with larger mortgage costs than it will the majority of residents in the area. Our village tends to be affected differently in times like this as the type of property and resident create a microclimate which is separate and somewhat protected from many of the goings-on across the country.

If you are feeling concerned about your finances, we recommend speaking to a professional who will be able to guide you through your options.

Get in Touch

If you are thinking of moving to the area or buying a property to rent, make sure you take a look at our amazing catalogue of properties for sale in Virginia Water and the surrounding areas.

If you’d like to speak to someone about properties to let in Virginia Water, a member of our expert team would be happy to help. You can call us on 01344 843000 or email us. You can also follow us on Facebook, Twitter, Instagram, and LinkedIn.

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