More than 180,000 properties were sold in the UK in March 2021, more than double last year’s volume of transactions
UK house prices are up 7.1% on last year, according to Nationwide. The average property price rose by £15,916 last year to reach £238,831.
The Nationwide reported that the increase in savings over the quarantine period means that some new buyers will find it easier to afford a home. However, prices could continue to rise as existing homes on the market do not keep up with demand.
Lucy Pendleton of independent property agency James Pendleton said:
“The market is at a boiling point. The silly season may be just around the corner. That’s when the sales market strengthens on the back of very high demand and you start to see opportunities to buy properties that are nothing special. This could bring price fraud back to the market.”
The Nationwide reported that prices rose sharply by 2.1% in April compared to March. Year-on-year price rises also accelerated, partly due to the extension of stamp duty holidays in England, Wales and Northern Ireland.
Annual change in UK property prices
“Our research demonstrates that while the stamp duty holiday affects the timing of transactions, for most people it is not the main motivating factor in encouraging them to move,” said Nationwide chief economist Robert Gardner.
The current state of the market has resulted in people queuing up all night in front of a property agent in Wales when new developments come on the market.
Nationwide’s figures are based on their own mortgage data and they suggest that the market is likely to be super active over the next six months due to stamp duty relief.
They believe price rises are also likely to accelerate as demand is expected to outstrip the supply of homes on the market.
Growth in savings
Some families managed to save money during the pandemic, giving them the opportunity to buy their own homes. Gardner estimates that a typical first-time buyer will have to save £19,500, or about 50% of their annual income, to make a 10% deposit on a mortgage.
“The fact that around a third of those buying their first home in England in 2018-19 said friends or family helped them collect the deposit through a loan or gift suggests that the recent rise in savings will help some. But it will not become widespread,” he said.
On the same day, Barclays chief executive Jes Staley said the accumulation of savings would help create the biggest economic boom since World War II in Britain.
The Nationwide reported that the long-term outlook for the housing market is more “uncertain”. “If unemployment rises sharply by the end of the year, as most analysts expect, there is the possibility of a slowdown, possibly a sharp one,” Mr Gardner said.
Nicky Stevenson, managing director of property agency Fine & Country, said: ‘Numbers like this won’t last forever, but the market won’t start to turn around until the busy summer season is over.
Translated with www.DeepL.com/Translator (free version)