Despite the fact that the next stage of the Stamp Duty Holiday is about to come to an end (30th June) and many buyers are likely to miss out, there are no signs of the market slowing. In May, asking prices on Rightmove jumped 1.8% and demand was 52% higher than even pre-Covid times. Supplies of new property, on the other hand, are currently running at no more than the long-term average.
Tim Bannister, Rightmove’s Director of Property Data comments:
“Last year’s unexpected mini-boom is rolling on into 2021, with new price and market activity records again defying many predictions. Buyer affordability is increasingly stretched, but there’s obviously some elasticity left to stretch a bit more as many buyers are squeezing their way into higher price bands. This high demand, with both willingness and ability to pay more, has pushed the average price of property coming to market to a new all-time high of a third of a million pounds.”
According to Nationwide's figures, annual house price growth hit 10.9% in May, its highest level for seven years. Housing transactions had fallen to a low of 42,000 during the first lockdown (March 2020) but hit 183,000 in March 2021.
It is becoming clear from the various stats that, although the Stamp Duty Holiday may have lit the touchpaper for the current boom, much of the demand is being driven by what the Nationwide has dubbed ‘The Race for Space’.
Robert Gardner, Nationwide's Chief Economist, said:
“Amongst homeowners surveyed at the end of April that were either moving home or considering a move, three quarters (68%) said this would have been the case even if the stamp duty holiday had not been extended.” He then adds, “Of those moving or considering a move, around a third (33%) were looking to move to a different area, while nearly 30% were doing so to access a garden or outdoor space.
In the longer term, the market’s performance will depend on our economic recovery and the signs are, currently, very good. The OECD (Organisation for Economic Co-operation and Development) claims the UK’s economy is likely to grow by as much as 7.2% in 2021 and is set to be one of the fastest growing of all the richest countries. Fears over unemployment are receding, too. Although it will peak at 6.1% when the furlough scheme comes to an end in September, it should then come down to around 5.4%, which is a lot closer to its pre-pandemic level (3.8%) than many were expecting.
The ‘Race for Space’ means London is one of the few areas that has not experienced double digit annual growth. Demand and prices are rising but at a far steadier rate. Asking prices were up 0.8% in May and annual growth edged into positive territory at 0.2%. The average time to secure a buyer, however, has fallen dramatically - a sure sign of increasing demand. It is currently taking just 57 days to achieve a sale. At the peak of the pandemic, it took 88 days and 67 during the capital’s mini-boom in early 2020.
Annual growth figures are now approaching and, in some cases, exceeding double digit annual growth.
Nationwide: May: Avge. price £242,832. Monthly change +1.8%. Annual change +10.9%
Halifax: Apr. Avge. price £258,204. Monthly change +1.4%. Annual change +8.2%
Land Registry: Mar: Avge. price £256,405. Monthly change 1.8%. Annual change +10.2%
Hometrack UK 20 City Index: Apr: Avge. price £266,200. Monthly change +0.5%. Annual change +3.6%
Rightmove: May: Avge. price £333,564. Monthly change +1.8%. Annual change +6.7% (asking prices on Rightmove). The average price in West Berkshireis now £451,408, up 11% over the last 12 months. The average detached properties are selling for £637,339. Semi-detached ones for £377,440 and terraced properties for £324,981.
If you’ve got a property for sale or rent in Wokingham, Binfield, Jennett’s Park, Warfield or Bracknell, just give us a call at Sears and we can talk you through your options.