The June Property Forecast 2021
11th June 2021
11th June 2021
2021 has been a rollercoaster year for UK house prices. With the imminent end of the stamp duty holiday on the 30th June having causing an influx of buyers, what we all want to know is can the market sustain its current trajectory?
The Land Registry, which works on a two-month lag, reported that house prices rose 10.2% year-on-year in March 2021. Nationwide said that prices were up 10.9% year on year in May of this year. And provisional data from HMRC shows that 117,860 sales were completed in April.
A combination of the extension of the stamp duty holiday and homeowners looking for more space as a result of the pandemic has flooded the market with potential buyers. But while the level of new properties coming up for sale is at a similar level to the long-term average, demand continues to massively exceed supply, so as a result, prices have been driven up. May saw a new national record for the price of property coming to market, hitting an average of a third of a million pounds (£333,564). That is 1.8% (+£5,767) above the previous all-time high recorded in April.
In the most recent report from Rightmove, Tim Bannister, the Director of Property Data said: “Last year’s unexpected mini-boom is rolling on into 2021, with new price and market activity records again defying many predictions. Buyer affordability is increasingly stretched, but there’s obviously some elasticity left to stretch a bit more as many buyers are squeezing their way into higher price bands. This high demand, with both willingness and ability to pay more, has pushed the average price of property coming to market to a new all-time high of a third of a million pounds.”
Prospective buyers are now faced with record prices for newly marketed properties in all regions and countries of Great Britain except London, with three areas seeing average rises of over 10% in the closest available year-on-year comparison. Our year-on-year comparisons compare March 2020 to May 2021, as the property market was suspended for most of April and May last year.
Bannister added: “There appears to be more headroom in buyers’ budgets among those looking to upsize. Family homes with three bedrooms or more are like gold dust in many areas of the country.”
So while the current house price forecast has things on the up, what is happening in the mortgage market? Buyers are certainly in the best position if they have a big deposit. Interest rates are relatively low, although they are starting to climb once again. The introduction of the government’s new 95% mortgage guarantee scheme should mean that there are more options going forwards.
‘It has been an unprecedented market for property sales at the premium end of the market in the South Hams over the last 12 months and as of June 2021 it is still exceptionally buoyant. However, the big question on everyone’s lips is how long will it last? Properties are coming in and selling within hours of hitting the market. Our buyers are predominantly from London and the Home Counties, which is a trend that hasn’t changed for us in many years, what’s changed this year is the amazing increase in volume. Young families choosing a quality of life for their children as working from home becomes the new norm and clients who normally holiday abroad looking for that third, fourth holiday home. It is definitely time to take advantage of an overheated market’
Prunella Martin – Director Prime Waterfront & Country House
If you are thinking of moving, now really is a great time, get in touch with us today to find out how we can help you not only sell quickly for the best price but also find your next home.