Property Market: Busiest Year in Six Decades
The property market continues to record robust activity across the UK, marking the busiest year in six decades. But is this growth spike sustainable? After all, they say what goes up must always come down. However, the property market remains resilient and continues to defy the odds. As many people question the stability of the market, property giants have released their forecasts for this current year.
Property Market Activity at Record-breaking Levels
Although many business sectors were hit hard this year due to the pandemic, activity in the property market rose to a record-breaking level. We believe the market has proven its stability and strength time and time again. Providing a much-needed confidence boost for those contemplating their first property investment.
The research and insight team at Zoopla have released the forecasts for this year. In the April 2021 House Price Index, sale completions are estimated to hit a high of 1.5 million this year. Last year this figure reached 1.04 million, illustrating the colossal surge of activity. Transaction levels in 2020 were the highest since 2007.
What does this mean for property investors?
The property market is currently performing at an optimum level, which comes as great news for property investors. Despite the increasing house prices, there are many regions across the UK where the housing markets are much more affordable. Yet are growing at a fast pace. Therefore, investors can purchase a development knowing they can achieve a very high ROI in a fast-growing city or town.
Will we see a drop in market activity?
The wave in market activity is set to remain high throughout this year and into Q1 2022. Although we may see an end to some of the covid-related government support schemes this September, we believe high-interest levels will persist. Activity will continue at rates above average due to the backlog of so many deals. According to recent data, the value of sales is forecast to hit a phenomenal £461bn this year. As a result of more homes exchanging this figure has grown by 68% from 2019.
In comparison to last year, property investors are seeing the annual house price growth doubling this year. The north of England continues to outshine the capital as it records the largest regional price growth once again. The region of Yorkshire, on average witnessed a 5.4% increase in house prices, according to Zoopla.
On the other hand, properties in London recorded a growth of 1.9%. London is showing the slowest regional growth rate, hence why investors have shifted their focus to the north. Although buyer demand has doubled in this region compared to 2017-2019, housing stock remains limited. Currently, stock levels are 20.8% lower than the same period last year. Therefore, prices are inflating because demand is outstripping supply. There is a clear correlation between areas of high affordability resulting in areas of high price growth.
Property Market: Busiest Year in Six Decades
While we are seeing better access to mortgage finances, first-time buyers are also becoming more active in the market. In March, mortgage lending hit a record high of £11.3bn. As a result of increased activity, the number of sales is predicted to rise by 68%, in comparison to 2019. The year 2021 is set to be one of the top ten busiest years since 1959. The property market is at its most active since the Global Financial Crisis. Research experts at Zoopla predict the value of sales will take to new heights of £461bn by the end of the year.
*Value of sales, actual and estimated figures from Zoopla Housing Index 2021
The Hottest Regional Property Markets
Due to demand outstripping supply, property prices in the city centre continue to climb in the midlands as well as the north. In addition, home viewing requests also grew by 59% compared to last year. For instance, property prices in Manchester rose by 13% over the year. Astonishingly, properties in Liverpool city centre have witnessed a property price rise of 32% this year. According to research by Strike, an online estate agent, the number of people buying or selling a home in Liverpool is nearly double the average pre-pandemic levels.
Andrews Property Group: Leeds, Manchester
Zoopla: Birmingham, Sheffield
A period of robust activity has been recorded across the prime housing market over the years. In the busiest year for the property market, the hottest regional markets for 2021 are the northern regions. Cities in the north of England are growing at a much faster rate in comparison to other regional markets. The stamp duty holiday extension has driven house price growth. Furthermore, the increasing availability of mortgages has also spiked housing demand.
A natural decline in the levels of demand can be predicted. This is mainly true for Q4 2021; however, we predict this will be a slow and steady decline. Therefore, will not impact property prices drastically. Nevertheless, figures will remain well above average through to next year as more businesses take advantage of flexible working patterns, causing more people to continue their search for a home to facilitate home-working.