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The demand for properties increases rapidly outside of London. As a result, house prices in the UK hit record high levels, since 2016. The Managing Director at Halifax reports, the average UK house price has risen above a quarter of a million pounds. The market also witnessed price inflation of 7.5% in October, compared to the same time last year.
Asking prices for newly listed properties are now 5.5% higher, in comparison to October 2019. Meaning, sellers are demanding a further £16,818 for homes, according to data from Rightmove. The market isn’t slowing down just yet! Rightmove also forecasts a 7% rise in property prices by the end of 2020.
A Booming Property Market
The surge in the property investment market, stems from a range of factors. Including the national lockdown, an increased demand for living space, and the introduction of the stamp duty land tax holiday. With significant savings of up to £15,000, the stamp duty holiday continues to bring purchases forward. Causing many to rush to beat the deadline, with only 4 months remaining.
“Prospective buyers are seeing properties selling fast and prices rising as they search for their next home adding to momentum and spurring them on to act quickly,” said Tim Bannister, Rightmove’s director of property data.
Priorities Changing with the Seasons
Due to increased home-working and studying, the pandemic has compelled many people to revaluate their current living spaces. Rewinding to the initial lockdown in Spring/Summer 2020, many took to their gardens to enjoy the pleasant British weather. Whilst others were considering a bigger space, hence the inflated demand for larger properties. Priorities for homebuyers has changed alongside the working conditions. With an increased demand for high-speed internet and space for home offices. Nevertheless, the demand for outside space has now softened as winter approaches. As expected, the focus from barbecues has now shifted to cosy interiors.
“Overall we saw a broad continuation of recent trends with the market still predominantly being driven by home-mover demand for larger houses. Since March flat prices are up by 2.0% compared to a 6.0% increase for a typical detached property. In cash terms that equates to a £2,883 increase for flats compared to a £27,371 rise for detached houses.” – Russell Galley, Halifax Managing Director
Approved Mortgages Reach Highest Level in 13 Years
Figures also show home-buyer mortgage approvals are at an unprecedented high since 2007. Illustrating the strengthening property investment market amidst the pandemic. This is evident in the figures by the Bank of England. In September, 91,500 mortgages were approved – the highest level in 13 years. It has been reported the sales pipeline is now 50% bigger than it was in 2019! Richard Donnell, Director of Research and Insight at Zoopla, estimates 418,000 house sales are progressing to completion. This is 140,000 more than usual, with a worth of an impressive £112bn.
According to Trading Economics, the market initially forecasted a Net mortgage lending of £3.8bn by UK households. However, the actual figure spiralled to £4.8bn in September 2020.
As house prices hit a record high and with a rise in approved mortgages, there is no better time to venture into your next property investment. Speak to one of our property experts to discuss your requirements.
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