The UK housing market has performed exceptionally over the last 18 months, helped in part by government support, lifestyle drivers and more recently, the vaccine rollout. However, 2 of the key challenges now facing the market are a fundamental lack of available stock and the end of the stamp duty holiday.
And the big question on everyone’s lips is how will the market behave now we are entering into the Autumn and the last quarter of 2021.
Let’s see what property experts are saying in terms of forecasts and trends.
BUYERS FAIL TO RENEGOTIATE POST STAMP DUTY DEADLINE
Estate agents Hamptons International wrote a very interesting article on the subject and I believe it provides a really good analysis on the impact of the Stamp Duty deadline.
The article states “For those who missed the end of June stamp duty deadline, a mixture of strong price growth and a lack of alternative homes for sale has meant that the vast majority of buyers have been either reluctant or unable to renegotiate the purchase price with the seller”.
It also concludes that “with new instructions numbers warning, it also means we’re unlikely to see a rise in renegotiations post September, when the stamp duty holidays draws to a complete close.”
PROPERTY PRICES WILL REMAIN STRONG
This is the next big question on everyone’s lips: Property Prices. Will these remain high? Or will the market soften a bit?
This is a topic of particular interest since I am a buying agent and my job is to advise clients with all aspect of their property purchase.
The reputable Property Industry Eye portal forecasts a strong property price growth to persist throughout 2021. Residential property prices in the UK have accelerated during the month of August, with values now being 13% higher than before the pandemic (source: data from Nationwide). The building society said that annual property prices growth sped up to 11% with the average UK home now costing £248,857. And there is no sign of this changing. In fact prices could rise further.
Phil Spencer, the famous Property TV expert and founder of MoveiQ also shares this sentiment for fewer sales in the coming months, and with no signs of prices falling. He says: “1 in 20 households have moved in the past 12 months, many fuelled by the desire to make the stamp duty savings, so it’s almost inevitable that fewer people will sell in coming months. Even so, the market will still be busier than in most recent years. And while the rate of price growth may diminish, that just means prices grow more slowly, not that they will fall.”
RURAL PROPERTY PRICES RUNNING TWICE AS FAST AS IN CITIES
For many, the pandemic has triggered a reappraisal of urban living, with increasing numbers fleeing city confines in search of green space and more rural settings.
The summer months have consequently seen house price growth hit the highest rate since 2014, and whilst prices are rising in most markets across the country, it is in rural areas that price growth have been performing the best: at nearly twice the rate as fast as in cities. Over the last 12 months rural property prices have been up 14.2% compared to urban properties prices that only increased by 6.8%.
What will happen next is anyone’s guess. During the first 6 months of 2021, Londoners purchased 61,830 homes outside the capital, meaning they accounted for 8.6% of all home purchasers!
The final easing of lockdown is likely to bring workers back into their city centre desks. While space and greenery remain a key driver for prospective buyers, amenities and services are of increasing importance. Knight Frank’s sentiment survey from June found proximity to pubs, restaurants, theatres and entertainment had gained in popularity. Proximity to such venues was more important for 31% of people compared to before the pandemic. That rise compared to an increase of just 18% at the start of this year.
But for many what was a temporary shift to working from home will now become a permanent part of their life, with the occasional city commute as and when needed.
PROPERTY STOCKS ARE AT AN ALL TIME LOW
Recently published data from the UK property market has highlighted what we have all witnessed throughout the last few months: a lack of stock of property for sale across the country. Parts of Britain are so short of homes for sale they have only half the number of listings to be expected at this time of the year.
Domus Holmes Property Finder is an independent property-buying agency providing a comprehensive property search and acquisition service to clients looking to buy a home or purchase an investment property in Bristol, Bath and the South West of England (Somerset, Gloucestershire, the Cotswolds and Wiltshire.
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