LONDON (Bywire News) -
Here Money.co.uk comments on the latest insights from Zoopla and its monthly House Price Index. The commentary can be seen in full here: https://www.money.co.uk/mortgages/news/UK-cities-seeing-house-prices-rise-fastest
James Andrews, senior personal finance editor at Money.co.uk, comments:
“It might not have been the plan, but the effect of lockdown and the stamp duty holiday seems to be a partial rebalancing of house prices.
A move to remote working, as well as shutting down many of the key attractions of city-centre living, has seen location become less important than the properties themselves.
This is particularly true in central London, with prices in the City of London, Kensington and Chelsea, the city of Westminster, and Hammersmith and Fulham all falling while the rest of the UK sets new records for growth.
These prime locations have also been hurt by a decline in international travel, with many of the most expensive properties going to an overseas buyer market that has effectively been grounded for more than a year now.
How long this will continue as offices reopen and foreign travel resumes is unclear - especially as the effect of Brexit on London’s attractiveness as an international city has so far been masked by the pandemic.
What is clear is that the move to buy a place in the country is one that many have embraced, and given the stress and strain involved with relocating a family, it’s one that will have far-reaching consequences for the economy for years to come.”
Highlights from Zoopla:
- Sales transactions are set to reach 1.52millon this year (to December), up 45% compared to 2020, according to Zoopla projections
- With average annual transactions rarely exceeding 1m - 1.2m per year over the last decade, this would mark the highest level of activity in the sales market since 2007
- As well as breaking a recent record for sales market activity, 2021 is projected to go on record as one of the top ten busiest years since 1959
- The value of homes sold in 2021 is expected to reach £461bn - up 46% or £145bn compared to 2020, and 68% compared to 2019
- Even amidst this level of activity, the market is expected to be curtailed by limited supply, which is down 20.8% in the year to mid-May, compared the average across 2020
- House price growth has almost doubled on the year, running at 4.1% in April - up from 2.3% in April 2020
- Demand for family houses continues to exert upward pressure on prices, with average annual values up 5.2% compared to a 1.1.% increase for flatsHottest regional sales markets include Wales, Yorkshire and the Humber and the North West, where property is selling 10 days faster than in 2017-2019 and prices are growing strongly
- At a city level, Liverpool and Manchester are registering the highest levels of growth for the fifth month in a row.
- Meanwhile, house prices in inner London are up just 0.3% on the year,with price falls in the City of London, Kensington & Chelsea, the City of Westminster and Hammersmith & Fulham
Grainne Gilmore, Head of Research, Zoopla, comments:
“Demand levels have moderated since the peak in Q1 as the economy opens up and life starts to return to some sort of ‘normal’.
The easing of lockdowns will continue to cause a natural fall in demand as people are able to see family and enjoy amenities that have been shut for more than a year, but new buyer demand will still emerge throughout H2 as office-based workplaces confirm if they will be pursuing more flexible working practices. Households who have the opportunity to commute less frequently have more options when it comes to choosing where to live, and this could prompt a move.
Likewise, older households will continue to review how and where they are living, with many more set to move for the first time in years. With an increased array of mortgages to choose from, first-time buyers will also remain active in the market.
At the same time, supply constraints will continue to underpin pricing. The lack of supply is expected to hamper potential sales during this year, yet even so, we expect total transactions this year to rise to 1.5 million, marking one of the busiest years in the UK’s residential market in more than a decade.”