At Hunters West Hampstead, we have seen how busy the housing market is of late. We speak with many buyers, and we know there is significant demand for property. It is good to see this level of activity is also found in official records.
For April 2021, property prices rose by 2.1%. This represents the most significant monthly rise since February of 2004. When you have the fastest rise in over 17 years, it is natural that you will pay attention.
In comparison with April 2020, house prices are 7.1% higher. It should be noted that April 2020 was when the housing market was virtually closed down, but even with that in mind, there has been significant change in the market.
Will the market continue to pick up?
The Nationwide Building Society states the typical UK property value was £238,831 in April 2021. They predict that house price inflation will reach at least 10% by June of this year. These figures suggest that even though there was a slight fall at the start of 2020, the housing market is picking up once again.
Robert Gardner, chief economist at Nationwide, said: “Housing market activity is likely to remain fairly buoyant over the next six months as a result of the stamp duty extension and additional support for the labour market included in the Budget, especially given continued low borrowing costs and with many people still motivated to move as a result of changing housing preferences in the wake of the pandemic.”
Robert Gardener continued by saying; “The property market defied the broader downturn in the economy last year thanks to a surge in demand for larger homes during the pandemic, tax breaks and ultra-low interest rates. At the start of the crisis economists were forecasting a property crash of 5% to 10% but house prices grew by 7.3%, the fastest rate in six years, even as the economy collapsed by almost 10%.”
Will the market soften later in 2021?
There is an expectation the housing market will soften later in 2021. When stamp duty relief is removed and the Governments income support schemes come to an end, some industry experts believe there will be an impact on the market.
Andrew Wishart, property economist at Capital Economics, said: “House price growth will ease towards the end of the year as the temporary boost from the stamp duty holiday comes to an end and base effects become less favourable.”
Andrew Wishart continued by saying; “Nonetheless, it is now only likely to cool to 5% to 6% year-on year by the fourth quarter, above the 3% we had previously expected. But because we expect a quick and full economic recovery and bank rate to remain at 0.10% until 2025, we don’t think that the ongoing boom in house prices will be followed by a bust.”
If you need any help or guidance regarding property matters, please get in touch. As your local housing market specialists, we will do what we can to ensure you make your next house move in style. Contact Hunters West Hampstead today for all your housing and letting needs.