The UK housing market has seen a considerable increase recently, with house prices 6.5% higher than they were a year ago. And, this increase is the sharpest rise for six years.
Despite the coronavirus pandemic’s impact on the economy, the housing market has remained unscathed. Nationwide has monitored the recent growth and have released that house prices have increased 0.9% higher from October to November, with the average property price estimated at £229,721.
The lender did add, however, that this growth is expected to slow down moving into the New Year.
What Buyers Are Now Looking For
From the late summer months and into early autumn, the UK’s house prices have quickly accelerated throughout many areas in the UK due to a change in their lifestyle and priorities. With everyone spending more time at home during the lockdown periods and being encouraged to work from home, many realised they had new requirements from their property.
In addition to a shift in their needs, buyers have also been driven by the Government’s decision to introduce a stamp duty holiday, extending this period until March 2021. The introduction of this tax-break saw house prices increase by 15.6% in August, with this spiking further to 21.3% in September.
However, despite all these factors driving the housing market forward, Nationwide’s chief economist, Robert Gardner, has warned that the fall-out from the COVID-19 pandemic is yet to be felt in the property sector.
The Long-Term Effects
Economist experts and analysts have also predicted that we could continue to see a change in our working trends even after the circulation of a vaccine for COVID-19; which would, in turn, also have an implication on the property market.
The chief UK economist at Pantheon Macroeconomics, Samuel Tombs, has commented that a narrow cohort is currently driving the UK property markets. This group consists of fairly financially stable households who only their own property outright, with little debt. They have found that due to a significant change in their working practice, staying at home and setting up a home office; they have been able to invest money they have saved from their travel costs, parking fees, as well as the money they would have spent on work lunches and coffee breaks.
Tombs went on to remark that house prices are somewhat vulnerable to the delayed fallout from coronavirus which is likely to strike next year. With workers slowly returning to the office and the stamp duty rates returning, coupled with mortgage rates continuing to be above their pre-COVID level, house prices could fluctuate from its recent rise.
There are some positives. The Nationwide has also provided research which shows properties which are located in National Parks carry a 20% premium when sold. This percentage could equate to £45,000 more. And, those which are situated on the outskirts of these sites of natural beauty (3.1 miles or 5 km away) could also sell for 6% more than a comparable property in an alternative area. These figures had inflated from the 19% premium last year.