We asked our General Manager Michael Stephenson BSc (HONS) MRICS for his opinion on the Housing Market in 2021…
The housing market has taken a breath in recent weeks, following the rush of activity leading up to the property tax ‘holiday’ deadlines. According to HMRC, nearly 200,000 sales took place in June across the UK, the highest monthly total ever recorded, with mortgage lending hitting an eyewatering £43.8 billion, over twice the monthly average of the five years from 2015 to 2019. Unsurprisingly, RICS report the number of new buyer enquires in July fell for the first time since March, while prices nudged downwards month-on-month according to Nationwide. However, demand continues to far outpace supply.
Consumer confidence has risen above its pre-pandemic levels (GfK), buoyed by the final easing of many restrictions in all parts of the UK. UK inflation slowed to 2% in July 2021, but economists suspect this is a blip and the Bank of England forecasts that inflation will head towards 4% by the end of the year. However, the Bank of England base rate is still just 0.1%. Mortgage rates therefore remain low, with property affordability on par with longer-term averages. At 7.25%, UK economic growth in 2021 is predicted to be the strongest in over 70 years. “Rightmove report there was a shortfall of 225,000 homes for sale in the first six months of 2021 and with little sign of any significant uptick in appraisals or fresh listings a lack of supply continues to underpin property prices. Asking prices are at a record high in all regions of the UK, with double-digit property price growth evident in ten regions of the United Kingdom. The demand/supply imbalance may well start to ease as ‘normality’ returns, but the majority of agents still anticipate price growth over the next 12 months,” Michael added.
Michael also states that at 13.2%, annual property price growth in the UK is considerably higher than the 2.0% recorded a year ago, as the market re-opened after an unprecedented lockdown. Price growth over the past year has been the strongest across the North West (18.6%), Wales (16.7%) and Yorkshire and the Humber (15.8%). Zoopla reports that the search for space has seen price growth for houses outstrip that of apartments over the past year. Properties continue to sell quickly. Rightmove report the average time taken to sell a property, from marketing to sold subject to contract (SSTC), is just 36 days across the UK.
It is estimated 880,000 property sales took place across the UK in the first six months of 2021, the highest half year total ever recorded and 50% higher than the same period in 2019. It is anticipated sales will top 1.5 million over the course of the year. Buyers have been spurred on by a desire for change and financial savings as a result of taxation ‘holidays’, with over 60% paying no tax on their purchase.
“The search for space continues to drive many buying decisions in the housing market. As businesses adopt more flexible ways of working, blended working patterns are set to become the norm for many, and personal wellbeing has shot up the agenda. The local environment, gardens, greater internal square footage and a demarcated space to work from home, all continue to be deemed more important property features in a new home,” Michael concludes.
Joplings are Members of The Guild of Property Professionals (The Guild)
The Guild is a network of 800 of the best independent estate agents from across the UK. The Guild is a sign of professional excellence that agents can use to differentiate themselves from their competitors and assure clients that they will act with knowledge and integrity to achieve results, the three core values of The Guild. To allow agents to perform a superior service, The Guild offers marketing, business and technology services to its members.