UK Property Market Update June 2021

Average house prices increased by 1.3% in Q2, with an annual growth rate of 5.4%, up from 2.2% in June last year.

London continues to fall behind the major northern cities with growth of 2.3% compared to 7.4% in Manchester.

Despite the end to the Stamp Duty Holiday, demand from buyers remains high and supply of new properties to the market is still insufficient, keeping upward pressure on property prices.

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UK House Price Inflation

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The average property price increased by 30% since the previous property market peak in 2007.

The highest level of house price growth has been seen in more affordable areas:

Liverpool price growth of 7.7%
Manchester price growth of 7.4%
London price growth of 2.3%

It is expected that the property price growth figure will continue to rise, peaking at 6%. Growth is anticipated to be moderate in Q4 as the Stamp Duty holiday draws to a close on the 30th September and the government’s financial support for the UK economy is gradually withdrawn, however, is expected to be between 4% and 5% by year end.

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Highlights

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Property price growth increases from 4.7% in May to 5.4% in June
Supply of property to the sales market is 25% below 2020 levels
Property price growth expected to peak at 6% year-on-year

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Regional Variations

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Property prices in the North West and Wales are experiencing strong levels of growth. The North West has seen price increases of 7.3% and Wales has seen increases of 8.4%, the highest rate of property price growth in these regions in 16-years.

Manchester and Liverpool have seen the highest levels of price growth on a city level, with prices increasing by 7.4% in Manchester and 7.7% in Liverpool. Aberdeen has seen prices decrease by 2.2% as the property market it closely linked with the oil industry. Several local authorities in London have also reported price decreases.

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High Levels of Demand for UK Property

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There continues to be high levels of demand from property buyers in the market, which is supporting UK property price growth. Demand from buyers is 80% higher than compared to the same period in 2017-2019.

The UK economy is gradually opening up after “freedom day”, with further COVID restrictions due to be eased in August, which may impact on buyer demand, in parallel to the summer holiday season. Many households continue to reassess their needs for their home and also their surroundings, reinforcing the inflated levels of demand seen year-to-date.

Record low mortgage rates with offers from the likes of Nationwide with interest rates below 1% for 60% LTV mortgages is encouraging more people to buy. The government initiative for 5% deposits for First Time Buyers is also encouraging more first time buyers to secure their first property, with lending to this market up 25% compared to 2020.

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Insufficient Supply of Properties for Sale

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The supply of properties to the market has improved month-on-month, however, is still 25% below 2020 levels.

This level of supply of new properties for sale is insufficient to refresh the properties being sold, as they are being sold extremely quickly. The activity from first time buyers is one of the key drivers, as to property sellers, they are very attractive buyers, with no property to sell, creating just a small chain. Click here to read more about the Risks of Buying Property in a Chain.

Sales agreed are up by 22% on the average levels for 2020.

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How Do You Invest in Property in a HOT Property Market?

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With all of the positive signs from the UK property market, with prices significantly increasing buy-to-let property investors are keen to find out how to invest in property without paying more than the property is actually worth.

Regency Invest help property investors secure the best deals for properties in areas of high growth, which we do by securing below market value property and excellent buyer incentives for developments that are that are under construction.

Speak with one our advisors today by completing our quick and easy 60-second questionnaire and we will be in contact with a variety of options that meet your investment criteria.

Explore our range of buy-to-let property investment opportunities in the North West of England where prices have increased by up to 7.7%, yet still has some of the most affordable properties and is forecast to see price increases of 28.8% by 2025:

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