The largest increase in house value in over 5 years - but is the housing market still growing?
Buyer demand still remains 55% higher than it was in 2019*. Whilst the Stamp Duty holiday has begun to wind down, there are still several factors that are encouraging for both buyers and sellers. Mortgage availability for first-time buyers is rising, and as people continue the search for more space, demand is still high - particularly for homes costing up to £250,000, which are exempt from Stamp Duty until the end of September.
Country homes in England and Wales increase twice as fast as cities
Rural house prices in England and Wales are increasing twice as fast as in cities. This is driven by the post-pandemic desire for more space and a greener way of life. Across rural areas, prices are climbing 14.2% a year compared with less than 7% in urban areas. The largest percentage increases are to be found in Broxtowe in Nottinghamshire, around Lancaster, in Arun in West Sussex and Amber Valley in Derbyshire - certainly not the usual hotspot suspects.**
New-build homes hit an all-time high
Across England, there are new-build homes being built at an unprecedented rate. According to the Ministry of Housing, Communities and Local Government, a total of 49,470 properties were completed between January and March, the highest number since records began in the early 2000s.
How will the furlough scheme ending affect the housing market?
The UK economy faces a moment of truth this autumn as the furlough scheme comes to an end and up to a million people will learn whether they will continue with their current employment. A mass loss of jobs could kick-start a cooling of the market as the number of potential buyers decreases and more people could look to put their homes on the market or downsize.
That being said, it's hard to predict what will happen. The UK property market continues to defy expectations and, for those looking to sell, there’s no doubt that now is the time to capitalise on the current impressive market. For buyers, house prices are continuing to rise. If you believe the experts, it looks like a prediction of a steady increase each year until 2025. If you wait, you risk facing even higher prices than you are seeing now.
Are people moving back to the city?
There’s great news for landlords and investors across UK city centres thanks to a substantial rise in demand for rental homes in urban areas in the second quarter of 2021.
According to Rightmove, 8 out of 10 of the UK’s largest city centres saw higher rents in June 2021 than in the same month in 2020. The demand has substantially reduced the average void period on lettings and revived the appeal of buy-to-let in many areas.
As lockdown restrictions continue to loosen, more socialising is permitted, and more shops, pubs and restaurants reopen, this is a trend that is likely to continue. It could mean investing in rental property in areas where students and young professionals will be returning could be lucrative.