UK Property Market Update May 2021

Average house prices increased by 1.1% in the three months to May 2021, with an annual growth rate of 4.7%, the same as February, which saw the highest level of growth since the beginning of 2017.

Buyer demand still remains elevated compared to normal market conditions, despite a moderation with the Stamp Duty Holiday coming to a tapered close, due to the continued undersupply of properties to the market.

First Time Buyers and those searching for more space continues to fuel demand.

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UK House Price Inflation

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The average property price increased by 4.7% an average of £10,246 over the past 12-months, the largest increase on value since October 2016.

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

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• Liverpool price growth of 7.9%
• Manchester price growth of 7.2%
• London price growth of 2.2%

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Highlights

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• 1.5 million sales completions are forecast for 2021
• Fastest moving property market in 5-years taking 22-days on average to sell a property
• Stock of homes available for sale remains constrained, with a decrease of 24% in the year to mid-June compared to last year’s average

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Regional Variations

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Property prices in Yorkshire & the Humber, the North East and Wales has hit a 10-year high, in stark contrast to London with 2.2% growth, which is the seventh consecutive month that the region has experienced the lowest levels of growth in the UK.

Once again, Liverpool and Manchester have experienced the highest levels of price growth with prices increasing by 7.9% in Liverpool and 7.2% in Manchester. These significant price increases have been attributed to their affordability, with 4.5x average household income needed to buy a property based upon a 15% deposit.

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Stamp Duty Land Tax Bands

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The property price growth over the past 12-months has resulted in 1.8 million properties in England moving into a higher Stamp Duty Land Tax band:

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• Up to £125,000
• £125,001 to £250,000
• £250,001 to £925,000
• £925,001 to £1,500,000
• Over £1,500,000

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It is estimated that an additional 940,000 properties will fall into the £250,001 to £925,000 band and 130,000 falling into the £925,001 to £1,500,000 band, meaning that they will pay more stamp duty.

Properties in the lowest band, under £125,00 is decreasing meaning that the revenue from Stamp Duty Land Tax will increase once rates return to normal from October.

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Fastest Moving Market in 5-Years

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The average time to sell a property fell from 42-days in May 2019 to 22-days in May 2021, which is the fastest moving property market in the last 5-years.

The property market is continuing to do well despite the Stamp Duty Holiday coming to a tapered close in July and October, which is evidence that the market has been fuelled by more than saving money on Stamp Duty.

It is expected that as the UK economy opens up with the “Freedom Day” on the 19th July, demand will ease slightly, however, First Time Buyers and buyers reassessing their housing requirements such looking for additional space to accommodate flexible working and access to outdoor space, will contribute towards elevated demand. As the supply of property for sale continues to fall short of demand, property prices are expected to see continued growth throughout the second half of 2021.

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Benefit of Buying Off Plan in a Hot Property Market

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Buy-to-let property investors are keen to expand their property portfolios with the continued price increases month-on-month.

The only issue is that buyers are paying more than properties are worth in the re-sale property market, eroding the returns. Buying property off-plan allows buy-to-let property investors to

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• Secure a property with a small reservation fee to avoid being outbid
• Buy at a fixed price
• Buy at a discounted below market value price
• Benefit from developer incentives to reduce the cost of buying
• Benefit from capital increased during construction without having to manage the property
• Buy multiple properties with a small deposit

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Register your interest today by completing our quick and easy 60-second questionnaire and our property experts 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, which has some of the most affordable properties and is forecast to see price increases of 28.8%:

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