There have a few driving factors that have led to the surge we have seen in the housing market over the course of the year so far. The stamp duty holiday and the pandemic-led ‘search for space’ are the two key ones.
It is expected that more than 1.5 million homes will change hands this year, a staggering 45% increase on 2020 according to figures released by Zoopla. This will make it the busiest year since the global financial crisis, and it shows not signs of slowing down soon as the scramble for properties continues.
Over the last 10 years, house sales have rarely exceeded 1.2 million, making this the highest level of activity seen since 2007 and it could well be in the top 10 busiest years since 1959.
What’s happening to House Prices?
The past year has seen house price growth almost double to 4.1% in April up from 2.3% in April 2020. Demand has continued to outstrip supply in the housing market. The greatest growth has been seen in areas where affordability is greatest, Wales, Yorkshire, Humber and the North West have all seen the greatest growth, and at a city level, Manchester and Liverpool have see the highest levels of house price growth for the fifth month in a row at 6.9% and 6.8% respectively.
Where affordability is more of an issue the growth has been much slower. Regions in the south have seen slow growth while London recorded the slowest regional house price growth for the sixth month at 1.9%.
What is fuelling the rise in the housing market?
There is no single factor fuelling the house price rise or the growth in the sales market, it’s a combination of several things.
The stamp duty holiday has played a large part in the surge in demand. People have been keen to take advantage of this offer before it expires and this has contributed to much more movement than we may have seen previously.
The pandemic
The pandemic has led to a lot of people revaluating their living space and deciding that now is the time to make the once in a lifetime move to somewhere with more space and especially more outdoor space. The shift to homeworking looks set to stay in some form as we come out of the pandemic with many large firms offering a much more flexible approach to their employees. This means that people have been able to look further afield in a search for space because the commute is no longer as big an issue. People having to live and work in the same space has led to a revaluation of their current situation. People want more room to be able to separate their living and working arrangements. This has also fuelled a demand for more outdoor space with people seeing much more value in gardens.
Mortgages
First time buyers are now able to access a wider selection of mortgages with 95% mortgages once again being offered by the High Street. With demand so high, they do face stiff opposition, but with the ability to spend reduced during the pandemic, some may be a strong position to have saved much more towards a deposit.
Outlook for the housing market
The general consensus for the housing market is that demand will start to slow slightly as we move out of all lockdown restrictions and people focus on catching up with friends and families and getting out and about more. However, demand for the second half of the year looks set to remain strong, with more companies confirming whether or not they will continue with home or flexi-based arrangements for their workers.
How can we help?
With the market in such a heated state it could be tempting to jump at any chance of a move if the house broadly fits the bill. No matter how desperate you are to move it is always worth taking a moment, stepping back and getting a survey done before you commit to buy. Once you have an offer in, an independent survey will let you know the condition of the property and whether there are any costly repairs that need to be done. It will give you the information you need to make an informed decision about the property is still right for you, or put you in a strong position to renegotiate the price. According to the Royal Institute of Chartered Surveyors (RICS) on average homebuyers spend £5,750 on repairs once moved into their new home, often due to the fact they did not have a survey done.
Avery & Co are all RICS registered surveyors and we are available for a range of services across the north west and north Wales. If you would like to discuss please do get in touch, we would be happy to help.
