UK Property Market Insight | Q3 2021

What factors are driving prices in the property market?

By the end of summer, property price growth is on track to hit 6%. This heightened growth will plummet slightly by the end of Q4, as expected near the festive season. This is because demand for housing will decline as priorities turn from house hunting to hosting! There are several factors driving the incredible rise in property prices. Although demand has increased by 23%, the supply of homes for sale has dropped. This is primarily due to the lack of new supply entering the market.

First-time buyers hoping to step onto the property ladder now have more of a chance to do so. This is because mortgage interest rates are at an all-time low. Although house prices are on the rise, it is much more affordable for buyers to secure a mortgage now.

Not enough housing supply is entering the market; therefore, housing stock remains scarce. Stock levels are running 25% lower than average in comparison to 2020. First-time buyers are flooding the market, as a result, lending is up by 25% compared to the year before. It is important to remember, first-time buyers have nothing to sell. Ultimately, this is causing the supply of stock to plunge significantly.

Astonishingly, Zoopla predicts the number of completed transactions will increase from 1 million in 2020 to 1.5 million by the end of the year. Signifying a robust performance by the property market.

Currently, those who invested in property are seeing huge returns on their investments. This is due to the continuous and steady rise in property prices. If you are looking to dive into your first property investment or hoping to expand your property portfolio – now is a perfect time! The North West, Yorkshire and the Midlands are showcasing incredible growth. However, these markets are still extremely affordable in comparison to the Capital. Therefore, investors can get more for their money!