UK Property Market Update April 2021

Buyer demand has been strong since the start of 2021, however, is expected to ease as the UK economy opens up, but buyer demand is predicted to remain high in comparison to previous years, creating one of the busiest sales markets in more than a decade.

‍

UK House Price Inflation

‍

The average property price increased to 4.1% in the year to April, compared to 2.3% in April 2021.

Prices remain high due to the continued undersupply to meet buyer demand, with the highest price growth in more affordable areas:

‍

• Liverpool price growth of 6.9%
• Manchester price growth of 6.8%
• London price growth of 1.9%

‍

Buyer demand in cities was running at double the levels of normal market conditions seen between 2017 to 2019 and a 10% decline in properties available to buy, driving price growth.

On a regional level, prices in Wales increased by 6.3%, followed by Yorkshire & the Humber at 5.4%.

‍

Highlights

‍

• 1.5 million sales completions are forecast for 2021, up from 1.04 million in 2020 and the highest level since 2007
• £461 billion of sales are forecast for 2021, an increase of 68% from 2019
• Stock of homes available for sale remains constrained, with a decrease of 20.8% in the year to mid-May compared to last year’s average

‍

‍

1.5 Million Property Sales Forecast for 2021

‍

Buyer demand remains strong, with lifestyle changes such as working from home creating requirement for additional space, prompting people to move and contributing towards the rise in the value of homes being sold. First time buyers are also becoming more active as they have better access to mortgages and a return of 95% loan-to-value mortgages.

The tapered Stamp Duty Land Tax holiday extension until October has also contributed towards the increased demand as people bring forward plans to buy a home, or, a buy-to-let property.

£149 billion of homes were sold during the first 15-weeks of 2021 and this level of activity is expected to remain throughout the second half of 2021, with 1.52 million property sales expected to complete in 2021 for a total value of £461 billion, 46% higher than 2020 and 68% higher than 2019.

This level of property sales would make 2021 the busiest sales market since the financial crisis and one of the top 10 busiest years for property sales since 1959.

As a result, mortgage lending in March has seen a record high of £11.3 billion, according to the Bank of England.

‍

The Hottest Property Markets

‍

The highest regional price growth has been in Wales, Yorkshire & the Humber and the North West of England.

The market is moving quicker than the market conditions in 2017 to 2019 in these regions, with the average time between listing a property and agreeing a sale being between 10 to 15-days, accompanied by the highest levels of price growth.

Properties in inner London are taking just under two months to sell, two weeks longer than the 2017 to 2019 average.

Invest in the Hottest Property Market

Buy-to-let property investors are taking the opportunity to add to their property portfolios with rents and property prices forecast to significantly increase over the next five years.

With properties selling so quickly and for more than the asking price, buying off-plan property has never been so attractive with below market value prices and excellent incentives to reduce the cost of buying. Off-plan property is chain free; therefore, if there is a break in the chain, you won’t lose the property. Properties can be reserved with a small reservation fee, avoiding bidding wars with other buyers, making it a more straight-forward, hassle free process for property investors.

The North West of England is forecast to see price increases of 28.8% and cities such as Manchester and Liverpool are some of the most affordable:

‍

• Manchester buy-to-let property investment
• Liverpool buy-to-let property investment

‍