Latest House Price Index highlights the unexpected twists and turns of our property market in a pandemic year
Rightmove has released its latest House Price Index results, showing that for the first time ever the average house price in Britain is now a third of a million pounds. This month saw prices jump up by £5,767, or 1.8%, leaving the average home now valued at £333,564. After an unprecedented year with unpredictable impact, nobody expected a housing boom in the midst of economic turmoil. So, what’s going on?
“We’re at a really interesting point in the property market,” comments one of our clients, Becky Munday, Managing Director at Munday’s Estate Agents. “The much-alluded-to ‘bubble’ is yet to burst on house price growth, fuelled by pent up demand, an era of cheap borrowing and first-time buyers wanting to get transactions over the line before the stamp duty window closes. As long as we remain out of kilter with supply drastically low, values across the UK will be pushed to their limits.”
The biggest gains were felt in Wales and the North, according to Rightmove. Wales led the way with growth of +13.0%, followed by North West (+11.1%), and Yorkshire & the Humber (+10.5%). Agents have attributed the huge spike in values being achieved here as being down to the shortfall of countryside properties on the market that suit people’s changed needs and lifestyles, with buyers upsizing even further away from previous urban footholds.
Becky says, “It’s no surprise that the North has seen the biggest gains. It is by and large a market which has long held the biggest opportunity for growth and still represents great value. People are now prepared to go even further in their race for space, with many more no longer chained to traditional commuter barriers or southern cities.”
Comparatively, London’s growth has remained subdued. Prices have stood still in the capital with just small gains of +0.2% since the first lockdown. The levelling of house prices in the Capital, however, has been met with a sigh of relief. “A slight correction in prices for a city that has previously seen incredibly high values achieved is not all bad,” explains Becky.
Average London house prices remain 2.9 times higher than prices in the North, and although still large, this is the smallest ratio recorded by Rightmove since 2013, keeping properties within reach for many domestic buyers.
Becky says, “Most buyers we see in London are local, with properties selling within a few weeks. It has created a genuine opportunity for local families to afford the space they need rather than feeling forced to leave the roots they’ve put down in London town.”
So, what’s next for the property market in another bonkers year for housing? Becky thinks the window of opportunity for sellers up and down the country may well be closing soon.
“In London we are seeing the immediate knock-on effects of a working-from-home culture take hold, coupled with the vanishing act of most international buyers. But this is about to change. The vaccination programme is accelerating, workers are slowly returning to the City, and travel is about to resume. House price growth in London may be slow and steady, but transactions remain buoyant – a sign of our city’s enduring resilience. Furthermore, a wave of newly vaccinated homeowners – who feel more confident about listing their homes now the virus is under control – is set to join the house moving frenzy and level up the playing field.”
Watch this space!