AUTUMN 2021 MARKET REPORT: AUTUMN OPTIMISM
There is little sign of any significant lull in housing market activity as final restrictions ease. Demand from home buyers continues to exceed available homes to buy.
Sales
Jubilant June
The housing market has taken a breath in recent weeks, following the rush of activity leading up to the property tax 'holiday' deadlines. Across the UK, nearly 200,000 sales took place in June, the highest monthly total ever recorded (HMRC), with mortgage lending hitting an eye-watering £43.8 billion, over twice the monthly average of the five years from 2015 to 2019. Unsurprisingly, RICS report the number of new buyer enquires in July fell for the first time since March, while prices nudged downwards month-on-month (Nationwide). However, demand continues to far outpace supply.
Confident consumers
Consumer confidence has risen above its pre-pandemic levels (GfK), buoyed by the final easing of many restrictions in all parts of the UK. UK inflation slowed to 2% in July 2021, but economists suspect this is a blip and the Bank of England forecasts that inflation will head towards 4% by the end of the year. However, the Bank of England base rate is still just 0.1%. Mortgage rates therefore remain low, with property affordability on par with longer-term averages. At 7.25%, UK economic growth in 2021 is predicted to be the strongest in over 70 years.
Price growth remains strong
Rightmove report there was a shortfall of 225,000 homes for sale in the first six months of 2021 and with little sign of any significant uptick in appraisals or fresh listings (RICS) a lack of supply continues to underpin property prices. Asking prices are at a record high in all regions of the UK, with double-digit property price growth evident in ten regions of the United Kingdom. The demand/supply imbalance may well start to ease as ‘normality’ returns, but the majority of agents still anticipate price growth over the next 12 months.
Lettings
Busy season
Renter demand rose for the fifth consecutive quarter during April to June, and with over one in five new rental tenancies agreed in August and September, the market is busy. The number of available properties to rent is down over a third on a year ago, with properties on average snapped up within 21 days of marketing (Rightmove). As in the sales market, a shortage of stock and heightened demand has seen average rents rise across all regions of the UK, including the capital (HomeLet). With the ‘work from home if you can’ advice now lifted, many of the UK’s largest city centres are seeing demand return.
Source: The Guild