According to recent reports, house prices once again continued to rise throughout the end of last year and this growth is expected to continue throughout 2021.
UK house prices climbed by over 7% throughout the course of 2020, the highest growth rate in six years. Nationwide found that house prices increased by 7.3%, whilst Halifax found that the increase was 7.6%. This impressive growth solidified the notion that the property market had well and truly bounced back following the unexpected challenges throughout the year.
House prices ended the year at an impressive 5.3% higher than they were before the first lockdown in March, showing a resilience that few in the industry could have predicted. December was an overwhelmingly positive month to end such a strong year for the market, with house prices increasing by 0.8% to that of the month prior and the average property being valued at £230,920.
HMRC also recorded record breaking statistics for the market in December. Subverting the traditional slowdown in the market during the winter period, data from HMRC revealed that December 2020 was the busiest month on record for 10 years as transactions increased by a massive 31.5% from the year prior.
Anna Clare Harper, the chief executive of asset manager SPI Capital, had this to say regarding the surge; The increase in residential property transactions – 34.2% higher than December 2019 and 14.0% higher than November 2020 – is good news for the property market.
Residential transactions in December 2020 were at their highest level for that month in a decade, although year-to-date figures are at a 9-year low. This was due to strict lockdown in April and May, where transactions were down by about 50% compared with the same time the previous year, and they grow only incrementally throughout 2020.
These figures represent recovery rather than boom. Right now, property transactions are being encouraged by the temporary Stamp Duty reduction. We are also seeing the release of pent-up demand and supply from earlier in the year when it was very difficult to buy to sell a property. Transactions have been dominated by second-time buyers, typically trading up to improve their surroundings, rather than first-time buyers ‘getting a foot on the ladder’.”
This impressive end to 2020 has already continued into the current year in the UK property market. A third lockdown in the UK has seen an increase in demand from those looking to purchase a property, with the pandemic forcing people to reassess their property needs. Analysis from Zoopla has found that despite this increase in demand, the flow of new homes coming to the market for sale is 12% lower than 12 months prior. The good thing about this however, is that this demand isn’t going anywhere anytime soon, and the pent-up demand will be unleashed as we carry on through the year and restrictions across the country begin to ease.
This imbalance of demand and stock is set to offer a boost to the property market, and Rightmove have forecast that this growth will continue throughout the year. The property portal has estimated an impressive 4% increase throughout the course of the year.
With the property market seeming as strong as ever, now is the perfect time for buy-to-let investors.