A second wave of demand for more space will continue to drive up house prices in Britain, with values increasing by as much as 3.5% annually between 2022 and 2024, according to one forecast.
The Hamptons realtor also predicted that more homes will be sold in 2021 than in any year since 2007, after a record spike in activity this year as families searched for larger homes after the pandemic.
Hamptons believes that the summer of 2021 marked the “peak of growth in house prices” and expects growth to slow in the coming months, so this year would end with average prices in Britain 4.5% more higher than at the end of 2020.
However, one of the factors widely credited with contributing to stronger-than-expected price growth during the pandemic, a “race for space” that has seen many buyers prioritize properties with larger gardens and more space. to work from home, you could settle down. to continue for some time.
Official house price figures, plus data from some commentators, indicated that the market had cooled after the partial end of the stamp tax holiday in England and Northern Ireland this summer.
According to the most recent data from Office of National Statistics, the median house price in the UK fell £ 10,000 in July compared to the previous month, although their figures showed that annual price growth was still 8%. Many homebuyers were quick to complete their purchases before a key stamp tax holiday deadline on June 30, and official data showed that sales fell almost two-thirds in July.
However, some more recent data has suggested that the market continues to boom, despite the threshold at which the stamp duty begins reverting to its pre-pandemic level of £ 125,000 on October 1.
Halifax, one of the nation’s largest mortgage lenders, said this month that the median cost of a property increased 0.7% in August; rival lender Nationwide put the monthly increase in August at 2.1%, the second highest in 15 years.
Flexible and remote working and other Covid-induced changes mean that households will move houses more frequently than during pre-pandemic times, according to the Hamptons. He is forecasting price growth for Great Britain of 3.5% in 2022, 3% in 2023 and then 2.5% in 2024. That would mean a 13.5% increase between the start of 2021 and the end of 2024.
The real estate agency predicts that North East England would be the best performer for the period, with property values rising 6.5% this year and then 4-6% annually between 2022 and 2024.
By contrast, London was expected to underperform the rest of the country for years to come, with prices forecast to rise 1.5% this year and 1% in 2022, the Hamptons said.
Various surveys have found that the widespread affordability and the rise of flexible work have led many households to leave the capital or consider doing so.
The stamp duty holiday was announced by the government in July 2020 to avoid a market crash during the first Covid crash. As of June 30 this year, the first £ 500,000 spent on property in England and Northern Ireland was tax-free, saving a buyer up to £ 15,000. On July 1, the tax exemption was lowered, with the threshold at which the property purchase tax begins to drop to £ 250,000, and this so-called “zero rate band” will return to £ 125,000 next month. The tax exemption has now ended in Wales and Scotland.
Meanwhile, real estate agent Knight Frank said the boom in demand for second homes that began after the first shutdown in 2020 continued as restrictions on overseas travel had left many people wanting a place to retire, away from the bustle of the city. He said his data showed that second home purchases outside of London rose 83% in the first eight months of 2021 compared to the five-year average.