The never-ending boom in the UK property market

The market has seen an annual rise of 7.1% this year, according to the latest data from Zoopla, with prices increasing on average by £ 16,000. Photo: Nathan Stirk / Getty Images

UK homeowners have benefited from a sharp rise in house prices in 2021.

The market has seen an annual rise of 7.1% this year, according to the latest data from Zoopla, with prices increasing on average by £ 16,000.

The total value of the UK housing market grew by £ 670bn in 2021 alone, bringing it to a total of £ 9.5bn, while the average house now has a market value of £ 240,800 compared to £ 224,800 a year ago.

There have been 1.5 million real estate transactions since Jan. 1, which is the highest number of sales since before the financial crisis, according to the data.

House prices in almost all parts of the UK have risen more this year than in 2019 and 2020 combined.

Here are some of the factors that have fueled the real estate boom over the past 12 months:

Stamp duty holiday

The government stamp duty holiday was a tax break designed to support the housing market and help consumers as the economy contracted during COVID-19 shutdowns.

It was extended from March 31, 2021 to the end of June and once again, tapering off from June to the end of September, as people rushed to the market.

Homebuyers could have saved up to £ 15,000 if they had bought at the right time this year.

The breakout caused a frenzy in the market, with many using it as an excuse to make long-awaited moves or buy for the first time. However, some have said that with house prices rising over the past year, the rebate has been quickly incorporated and has “cut” the market.

Watch: What do the stamp duty reductions mean for buyers and house prices?

Space race

The pandemic has led to a search for space among UK homeowners, with people seeking to appropriate property with more space through an increase in remote working.

Buyer demand has shaped the real estate market this year, averaging 15.7% above 2020 levels. Buyer activity peaked in June 2021, when more people moved into a new home than during any month since 2005.

“Such a busy market eroded the number of homes available to buy because properties were being bought so quickly,” said Grainne Gilmore, research manager at Zoopla.

“This imbalance between supply and demand has put upward pressure on prices.”

Read more: UK house prices experience third month of double-digit growth

Environment

According to the Royal Institution of Chartered Surveyors (RICS) last month, surveyors who operate in the residential sale and rental markets have seen consumers ‘willingness to reduce their homes’ carbon emissions increase.

It found that about a third of investigators saw an increase in demand for energy efficient homes, however, cost was the main barrier for current homeowners to make energy efficiency improvements.

More than three-quarters saw little to no impact of having an energy-efficient property on selling prices, however, 62% of respondents expected demand to improve over the next three years.

The survey sample covered a total of 510 branches from 295 responses.

Read more: Rising rents put pressure on nearly 5 million UK families

Personal finance

The UK economy is recovering better than expected, and employment and wages are booming, so much so that there have been a record number of vacancies in the country.

First-time buyers will also continue to benefit from the government’s purchase assistance program until April 2023, which means people will have more money and support for housing.

However, the Bank of England (BoE) recently raised interest rates from 0.1% to 0.25%, which means mortgage rates could be affected.

Watch Out: Will Interest Rates Stay Low Forever?

Interest rates have been so low in recent years that foreclosure has been attractive. Since 2019, 96% of new home owner loans have been taken out at a fixed rate.

In total, 74% of outstanding mortgages are fixed and borrowers will not see any immediate impact from the change. Experts expect the market to remain robust, with the threat of a rate hike not expected to reverse the positive price trends seen this year.

Read more: UK borrowing falls but remains second highest on record in November

London

As people were told to work from home where they could, London saw an exit from renting and buying in the city for adoption on the outskirts of the M25 and beyond.

As the economy begins to recover from the pandemic, there are now more people returning to the capital.

Guy Gittins, Managing Director of real estate agent Chestertons, said: “We have already seen the capital begin to wake up from its pandemic sleep in the real estate market with a return to the office and growing demand from overseas buyers, while helping to cultivate the first signs of house prices. prosperity.”

Chestertons saw a 12% increase in inquiries from buyers in London in November compared to the same month last year.

Watch: How much money do I need to buy a house?

Penny D. Jackson