It seems not even a global pandemic can stem the British appetite for buying homes. The ONS published figures showing an increase of 10.2% in the year to the end of March – the fastest rate of price growth since 2007.
Commentators are putting the demand down to a shift in homeowners requirements for more outdoor space and suitable working from home room. This appears to be supported in that the increase in prices for detached homes is 11% where it is around 5% for apartments.
It’s worth noting that housing completions dropped off significantly during April: 38% lower than March. However, context is important. April’s completions were still higher than any other April since 2007. The discrepancy between March and April may well have been the rush to complete before the anticipated end of the stamp duty holiday – which of course the Chancellor extended.
So what of the future? Is the bubble about to burst? Analysts don’t seem to think so.
Nationwide, the second biggest mortgage lender in the UK, still believes prices will continue to edge higher over the next five years, regardless of the stamp duty holiday coming to an end.
Savills supported this sentiment when they upgraded their forecast from zero to 4% house price growth in 2021 and a total growth of 21.1% for the five years from 2021 to 2025.
Knight Frank are even more bullish with a forecasted rise of 5% on average for the UK for 2021 and 25% over the next five years.