With 30 June behind us, residential property specialist, Victoria Cranwell, considers what may lie ahead for the UK property market in the second half of 2021.
To discuss your residential property requirements, including requesting a conveyancing quote, our Team are available on 01225 462871. Alternatively, you can contact them by email, or complete the Contact Form at the foot of this page. Conveyancing quotes are also available online.
As the dust begins to settle following the 30th June Stamp Duty deadline, what is the current state of the UK housing market, and what can we expect in the coming months?
Average UK house price
According to rightmove, average asking prices for residential property currently stand at £336,073, an all-time record, and price data from the Land Registry reveals that in January 2021, 37% of homes achieved their final asking price or above. This compares to 28% in January 2020 and is significantly higher than the long-term average of 23% between 2005 and 2021. But, Nationwide Building Society estimates that annual house price inflation has rocketed even since January, meaning that once available, the updated figure is likely to be considerably higher.
What’s in store for the market?
Stamp Duty step provisions are now in place until the end of September. Despite that, the market has definitely shown signs of cooling. That should not necessarily be viewed negatively as the recent feeding frenzy was only ever a short-term creation and unsustainable. Expert opinion is divided on what we can expect over the coming months, but inevitably there will be much regional variation. Estate agents Savills confidently predict that house prices will rise by 4% through the remainder of the year.
An interesting observation has come from Kevin Shaw, Group Managing Director of the national property group, LRG. He is quoted as saying that he expects sales momentum to continue.
“While it has been a crucial boost for the UK, research among our customers revealed that the Stamp Duty Holiday was far less influential on movers’ decisions in the first quarter of 2021 than it had been in late 2020” he said. “Getting on to the property ladder is now the most influential factor for moving, representing 25 percent of buyers’ motivations.”
Perhaps the greatest current impediment to moving home for many, particularly for first-time buyers, is the availability of a mortgage. As we reported recently, no sooner had the dearth of low-deposit mortgage deals begun to be addressed, it was revealed that soaring house prices has led to increasingly more mortgage applications falling foul of lending limits imposed by the Financial Conduct Authority in 2014.
And if that wasn’t enough to cope with, stories are emerging of people having their mortgage applications declined despite having a decent deposit, a sufficient income and a squeaky-clean credit history. The common denominator in these cases is typically the sector of the economy in which the applicants work, with those working in hospitality and retail coming under particular scrutiny, even if they were able to continue working through lockdown. It does seem wholly perverse to exclude somebody from a mortgage solely on the ground that they might lose their job at an indeterminate point in the future. One wonders whether those lenders should consider offering mortgages to key workers only!