Property Prices Soar Amid Turmoil of 2020

Despite a virtual halt to activity in the housing market during the first lockdown in March 2020, property prices rose beyond expectations in the year to December 2020.

What caused the increase?

Fuelled initially by city dwellers looking to move from small, expensive properties to larger, more rural homes following the first lockdown, there has also been the impact of the stamp duty holiday. Offering an average saving of £4,500 per transaction, this has helped to swell demand.

All parts of the country registered a rise in house prices this year, with the northwest and Yorkshire outperforming London and the southeast. However, sustainability is key and it is unlikely that prices will continue to rise at such a pace in the coming months.

Unemployment

Increasing unemployment due the pandemic is likely to have a major impact. Analysts suggest unemployment in the UK could reach a high of 7.5% by Spring 2021. This in turn will cause a weakening in consumer confidence, and the end of the stamp duty holiday on 31^st March is likely to calm the rush to transact that has been apparent in the last few months.

But currently, the market shows no signs of faltering and mortgage applications continue to rise along with the prices.

In summary

• Average asking price has now reached £319,945, according to Rightmove’s House Price Index (above).
• December 2020 prices rose by 0.8% across the country.
• Britian’s housing stock reached £9.06 trillion in 2020, according to Zoopla.
• Weakest growth was seen in commuter towns, but even so a 5.6% increase was still seen.
• Mortgage approvals rose for a fifth consecutive month in October; reaching the highest figure since August 2007, according to the Bank of England.

For further information please contact Ed or Kelly on 01284 365345 or email ed@granitebw.co.uk / kelly@granitebw.co.uk.