Strong U.K. Housing Demand To Drive Sales Into 2021
The U.K. housing market heads into 2021 off the back of one of the strongest years in recent memory, which a heightened lockdown and new travel restrictions threaten to derail in light of a more voracious strain of the coronavirus.
Nationwide, agreed-to home sales this year exceeded 2019 by £62 billion (US$83.48 billion), as the global health crisis has spurred people to reevaluate their living situation and priorities en masse, according to a report from listing site Zoopla. Low interest rates and a stamp duty holiday, which eliminated the transfer tax on the first £500,000 of the sale price (a maximum £15,000 saving) through the end of next March, also helped stimulate the wave of home sales in 2020.
The housing market is ending 2020 strongly with more buyers looking for a home than this time last year, said Richard Donnell, director of research and insight at Zoopla. More sales at higher prices have boosted the value of homes selling in 2020, led by a strong rebound in southern England.
House prices in the U.K. have increased 3.9% compared to this time a year ago—the strongest annual growth in over three years, according to Zoopla’s House Price Index.
Prices are rising the fastest in the most affordable parts of the country, though even in London and the South East—home to the capital’s affluent commuter towns—prices have risen by more than 3% compared to a year ago, according to Zoopla. Of the major cities, Manchester led 2020, with prices soaring 5.7%.
The sheer number of home transactions are also set to exceed 2019 levels, as well. Accepted offers across U.K. home sales blew past the five-year average in late October, according to separate research London-based brokerage Knight Frank published on Monday. Even in London, accepted offers have surpassed the five-year average.
The British housing secretary, Robert Jenrick, has said that the sales and rental markets will stay open during the heightened lockdowns. But the effect of the new restrictions—which ban gatherings of more than one household for the holidays—on buyer and seller sentiment remains unclear. If anything, the more stringent lockdowns will reinforce movement away from city centers toward the suburbs and the countryside, where larger homes and outdoor space are more accessible.