Spring is a season traditionally associated with hope and this certainly seems to be the case so far in 2021 – at least so far as the UK property market is concerned.
Chancellor Rishi Sunak got the ball rolling with his spring Budget on 3 March. He extended the stamp duty holiday by three months. The move provided plenty of hope for the 100,000 or so buyers who had been likely to miss the original 31 March deadline. Mostly, this was through no fault of their own but simply due to the processing pressures created by the sheer number of transactions taking place.
Next, the Chancellor gave first-time buyers fresh hope of picking up their first property, by announcing a government-backed scheme whereby first-time (and second-time) buyers could obtain a 95% mortgage. Such products had all but vanished from the market as a result of the pandemic, effectively ruling the majority of would-be first-time buyers from the market.
Spring also brings with it the promise of summer soon to follow. And this year in particular, people will be keen to embrace all that summer has to offer. The HomeOwners Alliance reveals that more people move in August (12.2%) than in any other month. That’s followed by July, when 10.8% of people move. In terms of property market movements, summer brings its own momentum.
All of this hope is reflected in Savills’ March 2021 residential market forecasts. The company’s previous forecasts suggested growth of 0% for UK property prices in 2021. That’s now been revised to projected growth of 4.0% for the year.
The revised forecasts follow house price growth of 7.3% in 2020, despite the UK economy contracting by -10%. The stamp duty holiday was a key driver behind that growth, yet behavioural change has been deemed just as influential, with buyers seeking larger properties in which to work, study and isolate from the wider world. The result was a record £120.5bn spent on property during Q4 2020.
Savills’ projections for the five years to 2025 are also resoundingly positive. The UK should see average house price growth of 21.1%. That growth will be led by the North West, where prices are projected to shoot up by 28.8% by 2025.
“For investors, the potential offered by the UK property market is huge. Developments such as Bishopgate Gardens in Preston are at the epicentre of this regional growth. They not only offer a solid monthly income but the chance to enjoy capital growth of nearly 30% over the coming five years. It’s a really exciting time to be involved in the market.”
Dale Anderson, Managing Director, Fabrik Invest