Property Market Roundup: 2021
The year 2021 brought great uncertainty. Nevertheless, the property market sailed through the year with record-breaking figures and skyrocketing levels of demand.
Let’s take a look back as we wrap up 2021…
01 | January
A Powerful Start
January set the precedent for a strong start to 2021. Despite the lockdown restrictions in place in 2020, property price growth hit a six-year high at the start of the year.
- The annual growth rate climbed to 7.3% in January 2021
- Annual growth rate hit a six-year high
- UK residential property transactions were 31.5% higher than December
- An extension to the Green Homes Grant was announced
02 | February
North-West Market Leads the Way
In February, house prices grew by 8.6%. In particular, the North-West began to lead the way.
- The strongest performing region with the annual house price growth reaching 11.9%
- City centres started to face the strongest pressures of rental decline in comparison to neighbouring boroughs, primarily due to the rise of home working.
03 | March
Mortgage Rates at Lowest Levels
Mortgage borrowing rates hit a new low in March 2021, this was fantastic news for investors and first-time buyers.
- The Bank of England made very sharp cuts to borrowing rates, in response to COVID-19.
- Mortgage rates fell to the lowest levels in history
- Low rates allowed first-time buyers to step onto the property ladder
- Spring Budget: The 95% LTV Mortgage Guarantee Scheme was introduced and an extension to the stamp duty holiday was announced
04 | April
Strongest Start to Spring in Decade
Things did not slow down in April. The stamp duty holiday was in place, mortgage rates were historically low, and lockdown restrictions were gradually being lifted.
- An index from Dataloft Demand showed a 36% rise in housing demand from the start of 2021.
- The North-South divide began to close, as demand in London started to decline and demand and prices in the North started to increase.
- Following the Spring Budget, buyer demand rose rapidly by 34%. Search enquiries reached record high levels.
05 | May
Demand Shifts from City Centres
House prices continued to sustain momentum in May.
- Demand for properties reached an all-time high as buyers raced to take advantage of the stamp duty holiday.
- Construction work came to a standstill throughout the lockdown periods, this added pressure to the severe shortage of housing stock.
- Rental demand started declining in city centres and increasing in suburban areas.
- London was hit the hardest by the lack of city centre demand, causing rents to plummet by 8% – a decade low.
06 | June
The First Homes Scheme
June was a monumental month for the property market.
- Annual house price inflation reached its strongest level for 7 years
- The First Homes Scheme was announced, therefore heightening demand in the market.
- The scheme allowed first-time buyers to purchase a property for at least 30% less than market value
07 | July
Renting Cheaper than Buying
As expected, by July 2021 property prices were showing no sign of slowing down.
- The First Homes scheme intensified market activity further.
- By July 2021, renting was cheaper than buying for the first time in six years.
- Due to the rising house prices, renting became a much more feasible option.
08 | August
A Slow Return to Normality
By August 2021, it was clear the property market needed to take a breather.
- In August, activity began to steady.
- Annual growth rates began to reach stable numbers.
- Levels of housing demand, dropped slightly, however, levels were still 80% higher in comparison to 2019.
09 | September
Record-breaking Levels of Tenant Demand
As per seasonal trends, September is a busy period for the rental market.
- Average UK rents broke the £1000 a month barrier for the first time on record.
- The success of the stamp duty holiday drove up property prices, causing tenants to remain anchored to the rental market.
- Rental demand was also high due to students returning to university.
10 | October
£8.6bn Affordable Homes
- This scheme was designed to support those stepping onto the property ladder and also generate 370,000 jobs nationwide.
- The scheme came into place following the elevating imbalance of supply and demand.
- The phase-out of the stamp duty holiday began, however, despite the predictions of a market crash, property prices continued to rise. Therefore, proving that property is inherently a predictable and secure investment vehicle.
11 | November
COP26 & the Future of Real Estate
In November, world leaders joined forces at a milestone conference, COP26, to compose a plan tackling the climate crisis before it is much too late.
- Real estate began taking responsibility for its role in the climate crisis. Energy-efficient properties began to move up the agenda.
- Investors were encouraged to think about how they can contribute to a greener future and how they can invest in more sustainable property. This is certainly a conversation we expect to underpin 2022.
12 | December
The North-South Divide is Closing
Most notably, in December we began to see the north-south divide closing. Even ever so slightly, this is an indicator that on a whole, businesses and investors are becoming less reliant on the capital.
- In particular, the North West has performed exceptionally well throughout December 2021, and we expect this to continue into the new year.
- Despite any predictions made about the December property market, Halifax’s house price index revealed inflation hit its strongest level since late 2006.
What can we expect in 2022? Stay tuned and find out in our next article.