Marketing No Comments

Housing market returning to pre-pandemic normality

Mortgage approvals for residential property purchases remained broadly unchanged in November, when compared with a month earlier, as activity in the housing market returns to what has been described as ‘normal territory’ following last year’s housing market boom fuelled by the government’s stamp duty holiday.

According to the Bank of England’s (BoE) Money and Credit statistics, 66,964 mortgage approvals were issued in November, marginally lower than the 67,103 recorded in October. This was the lowest number of approvals since June’s 40,500 but close to the 12-month average in the year to February 2020.

Remortgage approvals reached 44,529, up from 41,978 a month earlier.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you.

Jeremy Leaf, north London estate agent, said: “These figures show that the housing market is moving into more ‘normal territory’ as mortgage approvals return close to their pre-Covid averages.

“Certainly we are finding in our offices much the same pattern as buyers and sellers shrug off the loss of the stamp duty holiday and get down to business in the new year, especially as supply and demand are beginning to match up more closely.”

The data from the Bank of England also shows that net borrowing of mortgage debt increased to £3.7bn in November, from £1.1bn in October.

The net borrowing in November was however £2.9bn lower than the 12-month average to June 2021, when the full stamp duty holiday was still available. Gross lending increased to £22.1bn in November, from £19.5bn in October.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Joshua Elash commented: “These are positive numbers for the property and mortgage sectors as we kick-off the new year, with the Bank of England reporting that mortgage debt for individuals increased to £3.7bn in November. This tells the story of a market finding its feet after the end of the stamp duty holiday in September which led to October’s significant drop.

“Approvals for house purchases are also now close to the 12-month average up to February 2020. Approval for remortgaging remains low although we expect this to bounce significantly in the coming months as consumer concern over a rising base rate will persuade more borrowers to tie themselves into a fixed rate on a longer-term basis.

“December’s data is likely to be stronger yet, although it will be interesting to see how the now seasonal concerns over another lockdown may have dampened the momentum of the bounce back.”


Source: Property Industry Eye

Discover our Commercial Mortgage Broker services.

Marketing No Comments

November property transactions up 24% from October: HMRC

UK residential property transactions increased by 24.3% in November compared to the previous month, the latest statistics from HMRC show.

However, the 96,290 residential transactions last month was 16.4% lower than November 2020 on a seasonally adjusted basis.

Non-residential transactions last month were 10,840, 15.9% higher than November 2020 and 9% higher than October 2021.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you.

The provisional non-seasonally adjusted estimate of UK residential property transactions in November 2021 is 104,980, 13.4% lower than November 2020 and 22.7% higher than October 2021.

The provisional non-seasonally adjusted estimate of UK non-residential transactions in November 2021 is 11,340, 21.3% higher than November 2020 and 10.9% higher than October 2021.

Karen Noye says: “The increase in sales may well be halted in the coming months now that the Bank of England has increased interest rates as mortgage rates will subsequently rise. While the BoE had not yet made its decision to increase rates when this data was collected, lenders had already started to raise their mortgage rates as a result of wide speculation of a hike.

Discover our Residential Mortgage Broker services.

“Now the Bank has raised rates to 0.25%, prospective buyers may well be put off. Highly inflated house prices coupled with higher mortgage rates as a result of the hike will make buying a home all the more unaffordable.

“First time buyers, who are already often dealt the highest mortgage rates due to high loan-to-value ratios, will see the property ladder pushed one step further away.

“While it may make buying a home more difficult in the short term, the interest rate rise could well serve to knock back the massively inflated housing market. As less people are keen to move and demand decreases, house prices may well fall – albeit probably at a slower pace than some may hope.

By Bek Commane

Source: Mortgage Finance Gazette

Discover our Commercial Mortgage Broker services.

Marketing No Comments

House prices could grow by 35% between 2020 and 2025

Residential property prices look set to increase in 2022 and beyond, according to the latest forecast.

Strutt & Parker has predicted that house prices will rise by 7% next year in a ‘best case’ scenario, though it also made a ‘downside’ prediction of 2% growth.

These new figures indicate the pace of growth will slow as market activity settles following a buoyant market motivated by the stamp duty holiday.

By comparison, UK-wide house price growth reached 10.3% in the year to Q3 2021, the highest year-on-year growth seen since Q3 2014, with housing transactions over the same period reaching 442,930, the highest recorded since Q3 2007.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you.

Its predictions for Prime Central London (PCL) are however more positive and stand at 10% and 5% respectively. This follows the £5m-plus market increasing in Q3 2021, due to international high-net-worth buyers re-entering the market.

Guy Robinson, head of residential at Strutt & Parker, said: “The residential market has made a significant recovery in the last 12-months. This has been fuelled by high levels of demand across the market and attractive mortgage rates, while a rebound in the economy gave buyers and sellers confidence to trade up or down the housing ladder.

“Following significant house price growth year to date, rising at a rate that had not been seen for seven years, the outlook remains positive for 2022 and beyond. Buyer demand continues to be robust and applicant numbers are still significantly higher per property than any time since 2006.

“We are still seeing exceptional demand for family housing in the country with access to facilities and connectivity especially along the coast. That said, it is still unclear the extent to which the shifts in behaviour and lifestyles witnessed will materialise into permanent shifts in market demand. More time will be needed to adjust to these factors and there could be further corrections in the early part of 2022.”

Strutt & Parker’s PCL sales index data showed house prices rose by 0.7% from Q2 to Q3, up from 0.1% on the previous quarter. Year-on-year growth to Q3 2021 stands at 1.2% – the first time annual growth has surpassed 1% since Q3 2014 – however, PCL prices remain 20% down from their 2014 peak.

Louis Harding, head of London at Strutt & Parker, commented: “The first half of the year in PCL saw a record-level of transactions, supporting positive year-on-year growth. However, Q3 was unable to sustain or build on this momentum. As a result, prices have steadied in recent months and have yet to see the same rebound in growth as the mainstream regional market. However, we expect this to come through in the following 12-months as international travel resumes and pent up demand is released in to the market.

Discover our Residential Mortgage Broker services.

“The market continues to be driven by transactions on properties over £3m, and in particular the house market, with prime locations, such as Kensington, Chelsea and Notting Hill, outperforming the wider PCL market, and these trends are likely to continue in 2022.”

Across the UK’s regions (excluding Greater London), between Q1 and Q3 2021 sales transactions were up 37.5% by comparison to the same period in 2020. Strutt & Parker’s analysis of housing transaction volumes reveal Scotland, the South West and East of England recorded the biggest jump in transaction volumes.

Kate Eales, head of regional agency at Strutt & Parker, commented: “Beyond London, we have seen every part of the UK outperform in terms of transactions in 2021, with coastal villages and the Cotswolds emerging as popular hotspots. The £500k- £700k price range continues to move fast and properties in this bracket are the most coveted. We expect this will continue and anticipate properties in attractive country villages with good connections and amenities to show the strongest growth in 2022.

“Going in to next year, less-traditional locations in the likes of Norfolk and Herefordshire could be the biggest winners as buyers become more confident being further from London, though we are yet to fully understand the impact of lifestyle changes for those moving out of the capital. One trend however that appears here to stay is more and more sellers are entering the regional markets, but supply remains constrained.”

Area2021 2022 5 Yrs to 2025
Best CaseDownside RiskBest CaseDownside Risk
Prime Central London5%0%10%5%15% to 35%
UK10%5%7%2%20% to 35%
Prime Central London5%0%5%0%10% to 25%


Source: Property Industry Eye

Discover our Commercial Mortgage Broker services.

Marketing No Comments

HMRC: Residential transactions up 68.4%

Residential transactions in September stood at 160,950, 68.4% higher than September 2020 and 67.5% higher than August 2021, according to HM Revenue & Customs (HMRC).

The provisional seasonally adjusted estimate of UK non-residential transactions in September 2021 was 10,420, 20.2% higher than September 2020 and 8.4% higher than August 2021.

The provisional non-seasonally adjusted estimate of UK residential transactions in September 2021 is 165,720, 67.3% higher than September 2020 and 59.7% higher than August 2021.

The provisional non-seasonally adjusted estimate of UK non-residential transactions in September 2021 is 10,630, 17.8% higher than September 2020 and 17.0% higher than August 2021.

John Phillips said: “As the UK housing market steadily edges closer to normality, property transactions are returning to familiar levels.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you.

“There is no doubt that despite demand still desperately outweighing supply, the desire to move has not wilted for prospective buyers.

“Particularly those looking for larger homes as hybrid working models are adopted widely across the country and people seek office space at home. Buyers who find themselves in frenzied waters right now are – rightly so – making the most of low borrowing rates.

“As we look forward to the rest of 2021, it is safe to say that the number of buyers is not set to drop as people race to buy property before we see possible increases in interest rates.”

Stuart Wilson added: “Today’s findings are no surprise given the considerable activity witnessed in the run up to the conclusion of the stamp duty holiday.

“The holiday itself has been a resounding success, helping not only countless first-time buyers and second-steppers to move up the housing ladder, but also enabling silver spenders and last-time buyers to downsize, find more accessible housing, or move closer to family and friends.

“While the first-time buyer market was arguably the most buoyant, the stamp duty holiday encouraged more older borrowers to consider their options and we saw the tax break driving a 116% year on year increase in the number of people using equity release for property purchase.

Discover our Residential Mortgage Broker services.

“This increase in borrowers using lifetime mortgages to fund purchase activity has been sustained even after the stamp duty holiday concluded at the end of September, suggesting that it was instrumental in driving awareness around this under-used benefit of lifetime mortgages. This is but one of its many healthy legacies.”

Richard Pike says “We are all on a bit of a roller-coaster ride at the moment.

“One moment we’re up and the next we’re down.

“The housing market climbed quickly to the top during the stamp duty holiday, then it dipped as expected, and now we’re heading up again.

“In reality, we’re still riding pretty high and house prices, as reported by the ONS, continue to climb as demand for properties with more space and away from city centres remains.

“Inflation may yet play its part and the Monetary Policy Committee will have a lot to think about in its next meeting.

“However, the economy is still fragile and, although raising interest rates may be the conventional way to put a lid on rising inflation, the question is, can we afford to hamper growth after such a long period of stagnation.

“We may well see interest rates rise in the coming months, but it is by no means a certainty.

“Coming out of the pandemic was always going to be a tricky time, but for now our market is weathering the storm while many other industries are taking the brunt.”

By Jake Carter

Source: Mortgage Introducer

Discover our Commercial Mortgage Broker services.

Marketing No Comments

House price forecast: UK prices to stabilise in run up to Christmas

After a record breaking year, the housing market appears to have peaked and is set to cool, new research shows.

The latest Reallymoving House Price Forecast shows residential property prices will rise by just 0.1% over the final quarter of 2021 as the post-pandemic property market settles into a period of slower growth.

Prices will rise 1.3% in October, but decline by 0.1% in November and 1.1% in December. Conveyancing quote volumes are also on a downward trend, indicating a drop in buyer demand.

Conveyancing quote volumes continue to decline steadily, falling 4% between August and September, further indicating that buyer demand is settling back down to more normal levels.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you.

Reallymoving captures the purchase price buyers have agreed to pay when they search for conveyancing quotes through the comparison site, typically 12 weeks before they complete. This enables reallymoving to provide a three-month house price forecast that historically has closely tracked the Land Registry’s Price Paid data, published retrospectively.

It is estimated that house prices will rise by 1.3% in October as a result of deals agreed between buyers and sellers in July due to continued strong demand post stamp duty holiday and the limited supply of new properties coming on the market, creating greater competition for homes. This will be followed by a marginal fall of 0.1% in November and a larger drop of 1.1% in December, reflecting a drop in demand from buyers in the late summer as the post-pandemic property boom began to subside.

Following months of strong growth, house prices will rise by just 0.1% in the final quarter of 2021, bringing the average house price to £335,924 at the end of the year.

The shortage of stock as reported by agents is supporting property prices as the market adjusts to the end of all stamp duty incentives and the end of the furlough scheme, with the prospect of an imminent base rate rise an added incentive for buyers to get deals done as quickly as possible and secure a fixed rate mortgage deal while low-cost deals remain.

Discover our Residential Mortgage Broker services.

Rob Houghton, CEO of reallymoving, commented: “A return to slower growth and a steadier housing market is welcome, but there are a number of factors converging which could knock consumer confidence over the coming months such as the supply chain crisis, rising inflation and living costs, plus the prospect of increasing interest rates – though it’s too early to see their impact in the data yet. While the reduced supply of new homes for sale is making things difficult, buyers who are ready to move now are keen to press ahead and lock in a fixed-rate mortgage deal, helping keep their borrowing costs low.

“First-time buyers who have found themselves increasingly priced out of the market will be encouraged by evidence that the post-pandemic property boom is running out of steam, with prices falling over the final quarter in five UK regions and less competition for starter homes now that stamp duty incentives are over.

“For those who have held off making their move due to the frenzied market conditions over the last few months, now is a good time to buy and lock in a five-year fixed rate deal that will insulate them from any imminent rate rises and make it easier to ride out any short-term inflationary pressures.”


Source: Property Industry Eye

Discover our Commercial Mortgage Broker services.

Marketing No Comments

Strong demand ahead of a potential base rate rise – Rightmove

Every region of Britain saw residential property asking price records broken in October, as the national average increased almost £5,000.

It was the first time that every region broke asking price records since March 2007, according to Rightmove’s monthly house price index.

The typical asking price for a home has jumped in all regions of Britain, and now sits at a national average of £344,445, up 1.8% month-on-month, which is the biggest increase at this time of year since October 2015.

The North West and Wales both saw especially strong growth in asking prices amounting to 2.3%. They reached £232,639 and £237,830 respectively.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you

The South West and London both saw a 1.9% monthly increase, with prices reaching £359,906 and £650,683.

The number of sales being agreed was up more than 15%, compared to the same time in 2019.

Rightmove put the increase down to property purchasers wanting to secure their new homes ahead of a potential base rate rise, which is looking increasingly likely for later this year.

Tim Bannister, Rightmove’s director of property data, said:“Although more properties are coming to market, the level is still not enough to replenish the stock that’s being snapped up. Consequently, new price records have been set across the board, with every region of Great Britain and all of the three market sectors of first-time buyer, second-stepper and top of the ladder hitting all-time highs.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“This ‘full house’ is an extremely rare event, happening for the first time since March 2007. The stock shortages started after the first lockdown, and they look set to continue with the underlying housing market fundamentals remaining strong, and an additional incentive to buy and fix your mortgage interest rate before a widely expected rate rise.

“Mortgage interest rates are lower than they have ever been before and lenders are keen to lend in a competitive market, with employment and wage growth also robust. The number of sales agreed continue to be strong despite the end of the stamp duty incentives.”


Source: Property Industry Eye

Discover our Commercial Mortgage Broker services.

Marketing No Comments

Residential transactions up 4.2% year-on-year

Residential property transactions in July 2021 were 4.2% higher, at 73,740, than in July 2020, according to HM Revenue & Customs (HMRC).

However, HMRC found that this figure was 62.8% lower than in June 2021.

The provisional seasonally adjusted estimate of UK non-residential transactions in July 2021 was 9,760, 21% higher than July 2020 and 5.9% lower than June 2021.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you

Looking to the provisional non-seasonally adjusted estimate of UK residential transactions in July 2021, this figure was noted at 82,110, 1.8% higher than July 2020 and 61.5% lower than June 2021.

The HMRC provisional non-seasonally adjusted estimate of UK non-residential transactions in July 2021 was 9,730, 15.2% higher than July 2020 and 12.2% lower than June 2021.

Mark Harris said: “The stamp duty holiday focused the minds of many buyers who were already keen to move and improve their living conditions by acquiring more space both inside and out.

“Cheap mortgages have also played a significant part in the uptick in transactions and will continue to do so going forwards, even as the stamp duty holiday tapers off.

Discover our Residential Mortgage Broker services.

“Mortgage pricing continues to trend downwards, with a growing number of sub-1% products.

“But it is not just the deposit-rich who are benefiting from cheaper rates – those borrowing at higher loan-to-values are also seeing rates fall, with even 95% LTV deals now to be had at sub-3%.’

Jeremy Leaf, north London estate agent and a former RICS residential agent, added: “These figures for the period just after the withdrawal of the full stamp duty holiday are perhaps better-than-expected although reflect what we have been seeing – that buyers were still keen to proceed with their purchases, even though they were saving less than they would have done before the end of June.

“The figures clearly illustrate how many people brought forward buying decisions to take advantage of the stamp duty holiday.

“The market is definitely calmer now but many are taking advantage of staycations to keep in touch with market activity, with listings slowly beginning to rise again as prospective sellers return from holiday.”

Clare Beardmore said: “It’s hard to predict with complete certainty what will happen to the housing market after the government’s stamp duty holiday finishes this month.

“Most expect the numbers of people looking to buy and sell a home will reduce, but that house prices will continue to grow steadily due to an overall lack of housing supply and continued interest from property investors and other groups, such as first-time buyers.

“What has become clear is that record demand for homes has significantly increased property values in many areas of the country, making it harder to step onto the ladder, or buy the same size home as this time last year for an equal amount of money.

“That being said, one of the best ways to manage the cost of buying or owning a home is by getting a great mortgage deal.

“Mortgage repayments are normally the biggest regular expense a person will have, so locking in a better rate could effectively mean giving yourself a pay rise, if it results in hundreds of pounds saved each month.

“Speaking with an independent adviser is a great place to start when on the hunt for a mortgage, as it will often mean accessing a much larger range of options and potentially finding a deal which is better suited to your individual financial needs.”

By Jake Carter

Source: Mortgage Introducer

Discover our Commercial Mortgage Broker services.

Marketing No Comments

HMRC: Residential transactions up 9% in Q2

Residential property transactions in Q2 2021 were 9% higher than in Q1, and 175% higher than in Q2 2020, according to the HMRC Q2 Stamp Duty Statistics.

The HMRC data also found that non-residential property transactions in Q2 2021 were 12% higher than in Q1, and 79% higher than in Q2 2020.

Total Stamp Duty Land Tax (SDLT) receipts in Q2 2021 were 12% higher than in Q1 2021, and total SDLT receipts in Q2 2021 were 92% higher to those in Q2 2020.

Residential property receipts in Q2 2021 were 12% higher than Q1 2021, and 90% higher than Q2 2020 and non-residential property receipts in Q2 2021 were 11% higher than in Q1 2021.

The 2% surcharge on the purchase of properties by non-residents was introduced on 1 April, to date this has resulted in 2,700 transactions paying £19m.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

HMRC said the increase in residential transactions in the last four quarters was impacted by the introduction of the SDLT holiday for residential properties and an ongoing strength in the housing market.

Looking to First Time Buyers Relief, up to Q2 2020 there were 540,900 claims that benefited from that relief, and the total amount relieved by these claims was £1.2bn over the period.

An estimated 84,700 transactions were liable to higher rates for additional dwellings (HRAD) in Q2 2021, with the 3% element generating £485m in receipts, a decrease of 70% from the previous quarter, and a rise of 125% compared to Q2 2020.

Conor Murphy, chief executive at Smartr365, said: “The stamp duty holiday lit up what was an already heated property market and today’s encouraging findings reinforce just how instrumental this initiative has been in creating the ‘busiest H1 on record’.

“The stamp duty holiday has positioned the property market as a key driver in the UK’s economic recovery and thankfully enabled many in the industry to retain their jobs.

“Most remarkably, the break has created a golden opportunity for both first-time buyers and second-steppers to move onto or up the property ladder, when they otherwise would not have had the financial means to do so.

“However, with just eight weeks until the tax break draws to a close, the government should now plan how it will support buyers in its wake. Permanent reductions to stamp duty will help ensure homeownership remains an accessible venture and that the market retains its buoyancy come the end of September.

“It is crucial that this period of greater accessibility and heightened demand is not just a flash in the pan.”

Stuart Wilson added: “The stamp duty holiday has helped propel an already buoyant property market even further as the sector records one of its busiest periods ever.

“Today’s figures highlight the rush among prospective homeowners to meet the initial tax holiday deadline at the end of June.

“While much of the focus has been on the benefits of the stamp duty holiday for first-time buyers and second steppers, older borrowers have also been using this opportunity to find their forever home.

Discover our Residential Mortgage Broker services.

“We have seen the proportion of over-55s using equity release to fund property purchases triple from 5% to 15% since the outbreak of the pandemic.

“However, the clock is now ticking with just eight weeks to go before the tapered holiday ends.

“A buyer purchasing the average property used for equity release can stand to save £3,000, but with advisers, lenders and conveyances continuing to face delays, it’s vital to not only work closely together but also to manage client expectations.

“Advisers must also ensure the process is as smooth as possible by working with their clients to prepare all the documentation required from the outset, while as much as 20 working days or more can be saved when clients engage with a specialist equity release solicitor.”

Cloe Atkinson said: “Today’s figures show how the stamp duty holiday successfully boosted demand from buyers right up until the final deadline.

“The high levels of activity the housing market has been able to sustain since the market reopened in 2020, despite the difficulties imposed by the pandemic, show the success of this policy and are also testament to how adaptable and innovative the property industry can be.

“There is, however, still more work to be done. While the tax break boosted the number of house sales, a lot of the savings for buyers were swallowed up by soaring house prices.

“As the tax holiday comes to an end and prices continue to rise, it’s more important than ever that the industry to addresses issues around affordability and accessibility, particularly for those who have been financially impacted by the pandemic.

“Investing in the right technology now is going to be crucial to the future of the market.

“Innovation like open banking has the power to make the mortgage application process more accessible, especially for borrowers with more complex financial histories.

“At the same time innovation in this area will also allow for faster and more efficient lending decisions.

“The industry has come a long way since the market re-opened last year, it’s vital that it sustains this momentum and doesn’t settle for a return to the status quo.”

By Jake Carter

Source: Mortgage Introducer

Discover our Mortgage Broker services.

Marketing No Comments

House prices set to continue rising as supply shrinks

Residential house prices will increase by 9% this year as the market is driven by the extended stamp duty holiday and the impact of repeated lockdowns, Savills has predicted.

The estate agent has upgraded its expectations from the 4% annual price growth it predicted in March, prior to the chancellor’s stamp duty holiday extension.

Savills still expect property values to rise by 21.5% over the next five years, in line with previous forecasts, as price inflation eases following the removal of incentives.

Price growth continues to be fuelled by historic low mortgage rates, along with greater demand from buyers for properties with more space and greenery following months of lockdowns.

However, the company says that the shape of growth over the next four years is more difficult to forecast precisely given the extraordinary conditions of the past 18 months.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

“Some of the growth generated by the extraordinary market conditions of 2020 and 2021 could unwind at times during 2022, but we see nothing on the horizon that would trigger a major house price correction,” said Lucian Cook, Savills head of residential research.

Savills mainstream house price forecasts and economic assumptions:

202120222023202420255yr Total
Base rate0.1%0.1%0.1%0.3%0.5%
Unemployment (UK)6.0%4.6%4.0%3.7%3.6%
Annual Income Growth (UK)0.8%0.0%4.1%3.9%3.8%17.2%
Source: Savills, Oxford Economics

Cook continued “New buyer demand continues to outweigh supply despite the potential stamp duty saving falling from £15,000 at June 30 to just £2,500 until the end of September, and this against low levels of supply.

“This imbalance looks set to continue,  underpinning further price growth over the near term, particularly as people look to lock into current low interest rates.  But such strong growth in 2021 will leave less capacity for growth over the next few years, particularly as interest rates are expected to rise a little earlier than leading commentators had previously projected.

“The rate at which interest rates rise will also shape price growth. A steeper than anticipated jump in rates would restrict growth, although it would have to be severe to lead to actual falls in values – an outside risk in our view.”

Interest rate rises are critical to the forecasts, Savills says. The forecasts assume a Bank of England base rate no higher than 0.5% by the end of 2025.

A number of other key factors point to what Cook describes as a ‘soft landing’ for the market, rather than any dramatic correction in property values. 

Discover our Residential Mortgage Broker services.

Since the market reopened last year, price growth has been driven in large part by more affluent buyers, less reliant on mortgage debt and able to lock into low fixed interest rates. More generally, the pace of economic recovery has helped reduce unemployment levels, stress testing of lending is now embedded in the system, while interest rate rises are still expected to be slow and modest by the end of 2025, meaning a gradual squeeze on affordability.

These factors underpin Savills five-year forecasts, but they also indicate limited capacity for further price growth at the end of this period, without substantially affecting who is able to buy and the number of potential transactions. 

First-time buyers are likely to be increasingly reliant on government schemes and, where available, on the generosity of the bank of mum and dad, according to Savills. 

After a strong start to the year, and over 200,000 transactions in June alone, transaction volumes are projected to total 1.62m this, more than a third – 35% – higher than the yearly average over the five years pre-pandemic.

Savills continues to expect the markets of the Midlands and the North of England to show the strongest house price growth, due to greater capacity for growth before hitting affordability ceilings.  In the short term, however, buyer attention is expected to turn back towards urban markets, including London, as social distancing restrictions and international travel restrictions ease.

This will see the ratio of regional to UK average values slowly converge over the next five years, as the lower value regions see stronger growth, “catching up” with the rest of the country.

 202120222023202420255 years to 2025Av value* Dec 2020Forecast value end 2025
North West10.50%4.50%4.00%3.50%3.00%28.00%£176,925£226,464
Yorkshire & The Humber10.50%4.50%4.00%3.50%3.00%28.00%£172,326£220,577
North East8.00%4.00%3.50%3.50%3.00%23.90%£137,531£170,401
East Midlands9.00%4.00%3.50%3.00%2.50%23.90%£200,951£248,978
West Midlands9.00%4.00%3.50%3.00%2.50%23.90%£207,603£257,220
South West8.50%3.50%3.00%2.50%2.00%20.90%£264,512£319,795
South East9.00%3.00%2.50%2.00%1.50%19.10%£336,984£401,348
East of England8.00%3.00%2.50%2.00%1.50%18.00%£310,240£366,083
Source: Savills (*Nationwide)


Source: Property Industry Eye

Discover our Mortgage Broker services.

Marketing No Comments

The UK Residential Property Market’s First £100 Billion Summer?

The forecast, which takes the current trajectory of the housing market and applies it to the rest of summer months, estimates that there will be 420,000 sales in the UK across June, July and August at a total spend of a record £107bn. This will make this summer the highest grossing quarter in UK residential property market history, and is in stark contrast to previous years. Throughout the past half decade, total spend from buyers during the summer months has averaged £69bn-per-year, a figure that comprised of a little over 300,000 sales.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

Speaking on the forecast, Nick Whitten, head of UK living research, said: “It is well-documented that the Summer is the best time to sell a home, with sentiment receiving a natural positive boost from the warmer weather. However, our data suggests that this post-lockdown summer will set a new record. The reasons behind the buying bonanza – with the most exchanges and highest total sales value on record – are threefold. The stamp duty extension to the end of June means that during the quarter eager buyers and sellers will look to force a deal through. This, combined with the increased financial stability many buyers are feeling as we unlock from Coronavirus, and the well-documented supply constraints in the UK market, means we can expect to see demand swallowing up available stock, pushing up prices but not to the extent that it will affect transactions.”

The Government has set a clear priority to help more people onto the housing ladder through its Own Your Home campaign. The campaign puts the spotlight on six Government-backed support schemes to allow people to access some form of home ownership.

Discover our Residential Mortgage Broker services.

The forecasted spike in activity this Summer will be particularly evident in the north of England, which is predicted to see circa 100,000 sales – around 25 per cent of the total UK.

Stephen Hogg, head of north west and residential UK regions, said: “We have seen the market steadily improve and are fully expecting a further acceleration throughout the Summer. “North-shoring” is a trend we have seen pre-COVID but even more during and post-COVID with purchasers seeing better value for money in the north. Regional towns and cities continue to be voted the best places to live in the UK with less congestion and some of the best schooling. The regional cities are bouncing back quicker, HS2 offers further medium to long term growth prospects coupled with the Government’s levelling up agenda. Flex working is becoming the norm and therefore the need to live close to the Capital is diminishing. The historical brain drain of regional centres seeking high skilled high paid jobs in London is a thing of the past. With the likes of Manchester, Birmingham, Edinburgh offering opportunities equal to or not available in London they are now attracting a vast talent pool who in turn are boosting the local housing markets.”


Source: Property Wire

Discover our Mortgage Broker services.