As many sectors struggled during the global pandemic the property market was not one of them. With record asking prices across the UK, and official figures showing that house prices are increasing at their fastest rate for more than a decade.
According to the Office for National Statistics, HM Land Registry property values were up by 10% higher than the start of the year, meaning that it has been the fastest annual growth for 14 years.
In Manchester alone property prices have increased by 12% in the last year.
Why have we seen the increase in house prices?
According to Rightmove there are a few reasons for the increase in property prices.
- Relocation to the country or coast
One major factor has been that many people have decided to relocate to the country or the coast, this is pushing up house prices in the most demand regions such as Wales and the South West, which in turn having a knock-on effect in the rest of the UK.
- Interest rates at a record low
Another key reason for this increase has been due to record low interest rates and 95% mortgages, which have helped first time buyers get on to the property ladder. This has also given the opportunity to existing homeowners who want to upsize to bigger and more expensive homes.
- Stamp duty holiday
Along with these two factors another thing that has really helped many buyers to afford homes has been the stamp duty holiday. The tax applies to both freehold and leasehold properties regardless of whether you’re buying outright or through a mortgage. The tax break which was announced last Summer meant that buyers in England and in Norther Ireland would not have to pay any stamp duty on properties worth up to £500,000 this caused house prices to hit new records as buyers rushed to beat the deadline. In June average house prices hit a new record of £266,000, up by £31,00 or 13% on the same month last year.
London saw growth of 6.3% – continuing to see the lowest level of regional house price increases for the seventh month in a row, though its average price of £510,000 remains well ahead of others.
The fastest rate of growth was in North West of England, where prices climbed by 18.6% to just above £200,000.
What does the future look like?
As the stamp duty holiday comes to an end experts predict that although estate agent enquiries are still up by 40% there are signs that the market is cooling. Since properties are becoming in short supply and prices are now higher. However, for those looking to sell there home it still could be a good time to do so as many buyers are looking to move before the end of the summer.