One could say that property price rises across the UK in 2020 were fairly astounding and certainly bucked the wider economic trend by rising as quickly as they did – way beyond anyone’s expectations.
Under the spectre of an extremely unusual year, the UK economy took something of a roller coaster ride through 2020, with varying degrees of restrictions levelled across the country at different points.
As we now approach the much-anticipated end of these restrictions via the government’s roadmap back to normality, we’re beginning to see economists and Bank of England officials being much more optimistic about the chances of a V-shaped recovery, getting us somewhere close to where we were in terms of GDP (Gross Domestic Product) before the pandemic hit around this time last year.
In fact, in the recent budget delivered by the Chancellor he announced that the Office for Budget Responsibility (OBR) forecasted economic growth of up to 5.5% in the year 2021, with 2022 seeing huge growth of 7.3% taking us quickly back to pre-pandemic levels.
This good news has been well received in property and investment circles, with many seeing this as a signal that the extraordinary performance of the property market can continue throughout the year.
Uneven property growth
That’s not to say that property growth has been evenly proportioned so far, or evenly spread across the UK – with the north west of England, for example, enjoying some of the biggest growth across the country last year, with growth over 8%.
According to The Guardian, “Property prices in Yorkshire and the north-west could rise by almost 30% over the next five years, more than double the rate of growth in London.
Researchers had expected house prices to remain flat in 2021 across the UK, but measures to support the market including last week’s budget announcements, combined with the easing of lockdown measures, have led them to revisit their forecasts.”
The updated forecast seems to be following this existing upward trend for property prices across the UK and the North in particular, with the region enjoying a massive jump in demand that completely outweighs the supply.
Investors have been increasingly looking towards the north when It comes expanding their property portfolio in recent years as a lower entry price and rising rental demand has meant more rewarding yields in this area of the country.
One of the driving reasons behind this has been a shift in demand during the pandemic. The shift has resulted in many who were previously considering buying deciding they are unable to wait any longer and instead moving into more spacious rental properties or into city centres – resulting in a huge amount of pressure on property supply.
Add to that a noted rise in demand from first time landlords and property investors, and it has meant that demand is rapidly outstripping supply and putting huge upward pressure on prices and rents.
With this news, and the news that the treasury is highly likely to continue using state support for the property market at large, 2021 is looking like an excellent time to either invest in property in the UK for the first or increase your existing investments.