The UK House Price Index Q1 2021
For the year 2021 to date, we have seen continued growth in the housing market, although that was not across the board, and there are signs that things may be slowing down. However, this is difficult to predict as the housing market in the UK has already surpassed all expectations going into the pandemic last year. According to the property website Rightmove there were more sales agreed on March 23rd than on any other day in the past ten years.
What the data, for the first quarter of 2021, tells us is that the market is still buoyant in many areas, particularly in areas that have lower than average priced housing such as the North of England, Wales and Northern Ireland. There is still high demand for housing, particularly family housing, and like much of Q3 and Q4 2020 the demand outstrips supply by a large margin. Research by Zoopla states that demand for houses this year to date is up by 27.5% compared to last year but the supply of new houses is -6.1% compared to last year (source: Zoopla House Price Index, March 2021. Whilst this disparity continues the market will remain buoyant for the foreseeable future. Experts predict that towards the end of this year we may see a slowdown in the market once the Government’s Job Support Scheme (JSS) winds down and we start to see the real impact of the pandemic on the labour market. Robert Gardner, Nationwide’s Chief Economist, comments that at least for the next six months the market should remain stable and buoyant due to the measure the Chancellor announced in his March budget (source: Nationwide House Price Index, March 2021).
Overall house prices continue to rise in this competitive market and, according to Zoopla research, Wales has seen an annual house price increase of 5.9%. Nationwide, which has a different way of measuring things, puts the annual house price rise at 7.2% for Wales, one of the highest increases in the UK, based on figures in March 2021.
Rightmove state that April 2021 has seen new records set as prices hit an all-time high with a national average price of £327,797, a jump of 2.1% on March figures (+£6,733) (source: Rightmove House Price Index, April 2021). Other records tumble such as the average number of days to sell a property reaching its lowest-ever level, and the number of houses selling within a week reaching its highest-ever level. The market is described as frenzied and even though there were 145,000 properties added to the market in April it is not nearly enough to satisfy the demand. The result is the lowest number of properties for sale ever recorded. Richard Freshwater, Director at Cheffins comments that “this is the biggest lack of stock we’ve seen on the market for at least the past 20 years. Demand is huge, created by a perfect storm of low-interest rates, the stamp duty holiday and changes in people’s working patterns.”
In all our years of estate agency, we have never seen a market like this one. Demand for family homes is at an all-time high as people ‘search for space’ and employers confirm that flexible working is going to become more the norm once the lockdown eases, meaning families have more freedom with location choices for their dream home. Closed bids are becoming commonplace as we see several buyers making offers on the same property, resulting in a best and final offer process, with the asking price being met or exceeded. It truly is a seller’s market out there. With demand so high, but with no guarantee it will stay this high, this is a great time to sell.