A year ago, we predicted that 2021 would not be able to sustain the 7.3% house price growth experienced in 2020. Even the most bullish economists predicted no more than a 4.5% increase for 2021, yet, according to the Nationwide, 2021 closed with a 10.8% increase in the average UK property price.
Who’d have thought, during a severe pandemic, and as the effects of Brexit begin to bite with rising inflation, unreliable employment and a fragile economy, that the UK housing market could do so well!
The government thought they’d help avoid difficulties in such an important sector by introducing a generous stamp duty holiday from July 2020 to September 2021. Yet during that time, property prices rose by far more than the SDLT saving on offer.
The question is – can this growth be sustained? Let’s look at the facts: the latest wave of the pandemic continues; the Brexit transitionary period has just ended, inflation is over 5% (a year ago it was just 0.7%), interest rates have already risen, and the full effects of the end of furlough are waiting to be felt. There is talk that household fuel bills could double this year and we are all aware of the recent hike in petrol prices. Could all these factors combine to dent buyer confidence?
Possibly – but fortunately we have a huge safety buffer here. We know that prices are always determined by supply and demand. According to Propertymark, there are 29 buyers registered for every property available for sale. Even if this were to halve, which seems unlikely, there would still be more than 14 buyers chasing every property – which is more than enough for a vibrant, gently inflating market.
Many people had the foresight to bring their sale forward last year, and we find ourselves with far fewer properties for sale than we need to satisfy the relentless demand. So why not meet this demand if you possibly can and bring your property to market now. This is especially the case if you are trading up, as, in cash terms, the growth in your purchase price is likely to be greater than the growth in your sale price – potentially leaving you with a shortfall in cash terms.
Please do involve us in your deliberations. We’d be happy to help advise you on your options and how best to take advantage of this market. And do remember that about a third of sales happen “off-portal” – so don’t worry about not being able to find anywhere suitable – leave that to us! So please do call us today as we’d love to help you move.