The year 2021 has seen the highest home buying activity since 2006. Though several UK finance experts predicted that the real estate market would fall after the initial months of shutdown due to the pandemic was in for a surprise as the property market boomed more than ever before. Zoopla and other property websites came up with forecasts that 2021 would be the most happening year for the property market. It became the reality as the property sales soared to the highest since 2007. Experts including Sittingbourne letting agents say though the property slumped after the end of the stamp duty holiday on September 30 in both the UK and Northern Ireland the property transaction was considerably higher when compared to the second half of 2020.
Apart from the popular stamp duty holiday that pushed many to get on to the property ladder, there were several other factors that helped in the surge of property sales in 2021. It included the government guarantee for mortgages, and the lifestyle change picked by the homebuyers as many looked forward to buying bigger homes, with a spare room and more outdoor space. This was driven by the fact that many started working from homes, and people started to spend more time at home due to the lockdown imposed across the country.
The outlook of people preferences
When taking a look at the finances of the people during this year, it was seen that the unsecured debt had increased. It was also noted that the customers paying off their card bills on time and the mortgage arrears were lesser. According to a study by Halifax, it was revealed that the average price of a home increased by 0.9% after it rose to 1,7% in September. This meant the home prices in England were higher by £2,500. The first time buyers make their deposits and get access to the low-cost mortgages in making their dream of buying a home a reality.
The race for space was one of the most important key drivers that set the pace for the home buying process in the UK. Buyers were seeking larger and more spacious properties in the countryside and were ready to leave their urban homes. When this was combined with benefits like the stamp duty holiday and more there were more people looking to buy a property in the property market. The Stamp duty holiday saw a spike in the average prices of homes and it still continued to rise even after the end of the stamp duty holiday. The house price inflation stood at 8.1% when calculated annually. This was the strongest since June. The price inflation in Wales continued to be the strongest by being at 12.9% where the average home price was at £198,880. In Scotland, the average price stood at £190,000 with an 8.1% price inflation in a year
North-west England was the strongest performing region with the high price rise of 10.4% which was the highest in the four months. The average house price in this region stood at £205,881. Despite all this London saw the weakest growth with a 0.8% price rise which was the lowest since February 2020. The interest rates were at their lowest levels but the study by Halifax predicted an imminent rise. With the increase in the interest rates, the borrowing costs will be still unaffected, but the struggle will lie in building the deposit for the mortgage.
Though the housing market activity is benign to the overall economy of the country with the end of the furlough scheme and the number of vacancies going high the unemployment is rather high. With the overall stats of the housing market still pointing to be favourable the housing market will be there to thrive in the coming months without a doubt. Even though the market will be busy in the coming months, it will not be as frenetic it was in 2021.
Continuing for the fourth month the UK house prices rose and the average prices reached £270,000 for the first time according to Halifax. But mortgage lenders predict that the market will slightly slump in the coming months as the Bank of England raises interest rates. As there are a few more weeks to go till this year comes to an end, the home buying is currently less and house purchase activity is moving at a slower pace.