While 2020 was an extremely challenging year, it is fair to say that the housing market ended the year robustly. This was the case across the four nations of the UK, and in dividual tax benefits were the driving factor in the growth.
According to the Nationwide Building Society, the average UK house price rose to £230,920, which was an increase of 7.3% over the entire year. In December 2020 alone, there was a rise of 0.8%.
Since the lockdown in March, property prices have risen by 5.3% across the United Kingdom.
Uncertain times in the housing market
Robert Gardner, Nationwide’s chief economist, said: “The resilience seen in recent quarters seemed unlikely at the start of the pandemic. Indeed, housing market activity almost ground to a complete halt during the first lockdown as the wider economy shrank by an unprecedented 26%. But, since then, housing demand has been buoyed by a raft of policy measures and changing preferences in the wake of the pandemic.”
Robert Gardner has acknowledged the uncertainty in the housing market, and this is going to impact how the market performs and behaves over the rest of the year.
He said: “Housing market activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March.”
While people are looking for positive signs regarding the 2021 housing market, some experts have issued caution, and even made pessimist noises. Howard Archer is the Chief Economist at the EY Item Club.
They believe that the property market could fall by around 5% by the end of 2021.
Howard Archer said; “The EY Item Club believes that the housing market is likely to come under mounting near-term pressure as the economy is hampered by pandemic-related restrictions, while there may well still be a significant rise in unemployment despite the furlough scheme being extended until April.”
Wales performing strongly
The research found that England saw the highest growth among the home nations in 2020, with prices rising 6.9% year on year in the fourth quarter.
While England saw the highest growth of the home nations in the final quarter of 2020, Wales came in Second. The English rise was 6.9% for the year-on-year increase in the fourth quarter but in Wales, there was a 6.6% increase.
In Northern Ireland, the increase was 5.9% and Scotland experienced the slowest rate of growth at 32.%.
If you are looking to value your home, we can still provide this service. We know that many people are making plans for the future, perhaps driven by recent lockdown measures. If you need any guidance in the housing market, we can help.
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