Our monthly update on the UK housing market – covering sold and asking prices, current market sentiment as well as the property outlook for the months ahead.
In the year to June 2021, UK house prices increased by 13.2%.
The average sold price of a property in the UK now sits at £265,668. This is 4.5% up from May 2021 – and represents yet another significant monthly increase. To put this in perspective, during same period a year earlier prices increased by just 1.4%.
The North West has continued to lead the pack on price growth, where prices increased by 18.6% in the year to June 2021. The London market remains slow, with prices rising by just 6.3%.
Whilst new buyer demand eased slightly as the Stamp Duty holiday came to an end, the number of property transactions has remained high – increasing by 74.1% on a seasonally adjusted basis.
Indeed, the number of transactions on residential properties in June with a value of £40,000 or more was 198,240. This is 219% higher than a year ago!
The summer holidays usually lead to a slowdown in the market, both in terms of activity and price.
Whilst August witnessed the first overall monthly price fall of 2021, this was only a reduction of 0.3% (-£1,076). This reduction was largely driven by cooling at the higher end of the market. Two-bedroom and first-time-buyer properties have conversely risen by +0.06% (+1,328).
Explaining this difference is the fact that lower-priced properties are less impacted by the withdrawal of stamp duty incentives, with many first-time buyers having more free time and staying closer to home over the summer months.
Buyer demand remains reasonably strong, with enquiries up by 56% on the same period in 2019 (and down by just 17% on the frantic post-lockdown 2020 numbers). Stock remains at a record low however, meaning that properties are selling incredibly quickly. The average time for new properties to be marked Sold Subject to Contract is the quickest ever at just 36 days!
The most recent RICS UK Residential Market Survey reports a slight cooling in activity as the Stamp Duty break comes to an end.
New buyer enquiries slipped to -9% in July (as opposed to +10% the previous month), with newly agreed sales falling to -21% (compared with -1% back in June). Momentum slowed most in Yorkshire and the Humber, the East Midlands and East Anglia.
The number of new listings remained in decline (-46% down in July, down from -35% previously), marking the fourth consecutive monthly contraction. This continues to underpin house price growth, with price increase indicators at +79%.
Just 5% of contributors expect the number of transactions to rise over the next three months. Consequently, house prices are likely to continue rising over the next 12 months.
Given the continued lack of supply of homes listed for sale (especially family homes) coupled with limited choice for buyers – buyer interest may start to slow.
With the end of the stamp duty holiday, economic uncertainty and the ending of government support, a cooling of the market is highly likely.
However, this is anticipated to be a gradual decrease (with demand remaining above usual levels) as the “reassessment of home” has further to run. Price growth is thus expected until the end of 2021 and beyond.
Whilst there may be a busy start to 2022 (in line with seasonal trends), a return to normal market activity during the remainder of this year will result in the gradual rebuilding of stock levels.
For a full, comprehensive breakdown of current property market activity. Visit our Express Index here
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