House prices have been rocketing since the start of the
pandemic, as people have sought more space, saved more money and taken
advantage of tax breaks on buying a home.
Households have been unable to spend as much money as usual, allowing those
that have still been in work to save up for a deposit.
After the property market was temporarily paused in March last year, activity
surged, with record sales.
The average sale price of a home in England jumped 10.2 per cent in a year from
the start of the pandemic in March 2020.
Now the UK residential property market’s first £100 billion summer is on the
horizon.
A forecast, by consultancy UK Residential Research, which takes the current
trajectory of the housing market and applies it to the rest of summer months,
estimates that there will be 420,000 sales in the UK across June, July and
August at a total spend of a record £107bn.
This will make this summer the highest grossing quarter in UK residential market
history, and is in stark contrast to previous years. Throughout the past half
decade, total spend from buyers during the summer months has averaged £69 billion-per-year,
a figure that comprised a little over 300,000 sales.
Speaking on the forecast, Nick Whitten, head of UK living research, said: “It
is well-documented that the summer is the best time to sell a home, with
sentiment receiving a natural positive boost from the warmer weather. However,
our data suggests that this post-lockdown summer will set a new record.
“The reasons behind the buying bonanza – with the most
exchanges and highest total sales value on record – are threefold. The stamp
duty extension to the end of June means that during the quarter eager buyers
and sellers will look to force a deal through.
“This, combined with the increased financial stability many buyers are feeling
as we unlock from coronavirus, and the well-documented supply constraints in
the UK market, means we can expect to see demand swallowing up available stock,
pushing up prices but not to the extent that it will affect transactions.”
The Government has set a clear priority to help more people onto the housing
ladder through its Own Your Home campaign. The campaign puts the spotlight on
six Government-backed support schemes to allow people to access some form of
home ownership.
The forecasted spike in activity this summer will be particularly evident in
the north of England, which is predicted to see circa 100,000 sales – around 25
per cent of the total UK.
However, with interest rates remaining very low, some analysts are predicting
that prices are set to continue on a seemingly relentless upward march.
The situation also raises questions about how sustainable it is for property
prices to rise faster than wages.
All of these factors mean there is lots to consider for anyone thinking of
buying or selling a property.
For help and advice with related residential property matters, please get in touch with our expert team today.