Written by Carly Freestone | 1st July 2021
The UK property market is on course for its busiest year since the global financial crisis in 2007-08. House prices are rising at the fastest rate in more than 16 years and June was the busiest month of 2021 so far. The property market is so hot that despite the tapering of the tax break holiday until the end of September, experts are predicting a summer sales bonanza.
Property consultancy JLL has forecast that there will be 420,000 sales in the UK this June, July and August, with a total value of £107 billion. This will be the highest grossing period in residential market history.
So what factors are driving this pandemic property boom and what will happen to house prices when the stamp duty holiday ends?
Covid-19 has changed the way we view cities and for many families accelerated their plans to move out of them. The pandemic has revolutionised homebuyers' priorities and there is no going back. London buyers keen to swap city life for the rural idyll are fuelling the market frenzy. The number of homeowners buying outside of London hit a four-year high in December 2020, despite the housing market having been closed for nearly two months earlier that year. London’s population is predicted to decline in 2021 for the first time this century.
Many major London firms are shifting permanently to working from home arrangements. Buyers no longer have to prioritise a short train journey because for many their commute is only part time. The result? Demand for village properties has gone through the roof. Michael Graham’s entire region offers the best of both worlds to these buyers: an affordable country home with a garden, a short drive from a train station within an hour’s commute of London. Buyers can move further out and get more for their money and our sellers are benefitting from this well documented ‘race for space’. Michael Graham has three times as many registered buyers from the Greater London area than before the pandemic.
Our region has always offered good value for money compared with properties in the home counties geographically closer to London. Freed from a daily commute, buyers are taking advantage of that affordability. Families fleeing London are now choosing Bedfordshire over the county’s more expensive neighbour Berkshire. Northamptonshire is among the top three counties in England where the market is hot and benefitting sellers, according to figures from data company PropCast, and buyers are homing in on villages in Northants over the traditionally more fashionable Cotswolds. Parts of Buckinghamshire are trumping the classic commuter heartland of Surrey as people discover that the cultural and restaurant scene is just as vibrant in Milton Keynes as it is in Guildford. Michael Graham agents across our network of offices would be delighted to talk to you about popular local towns and villages in their area.
Across England multiple buyers are chasing every £1million plus country house. Prime village properties for sale inside the new commuter belt are going under offer in a matter of days. Villages with top primary schools and sought after local grammar schools are key to driving house prices.
The Chancellor’s announcement of the stamp duty holiday extension from March to June and then the tapering until the end of September initially propelled more sellers to get their homes on the market which added fuel to the property market fire. However, in reality it is the larger country homes that are behind the majority of price increases underlining the fact that it is the demand for more space, rather than tax breaks, that explains the housing market boom. Consequently, the end of the stamp duty holiday is expected to have very little impact on the housing market.
The successful vaccination rollout and the prospect of lockdown restrictions being lifted has led to a surge in consumer confidence and new instructions. Many sellers are now double vaccinated and ready to open their homes to viewings, enabling them to act on their own plans to downsize, upsize or more generally relocate. The traditional summer slowdown is not expected this year. With foreign travel restrictions keeping most of us in the UK, house hunting may well continue unchecked throughout July and August and this demand will bolster already high prices.
Office for National Statistics figures show that UK house price growth is now at 8.9%, the highest level of annual growth for seven years. New buyer enquiries continue to exceed new instructions, and sales agreed far outweighed new listings in May, according to figures from the Royal Institute of Chartered Surveyors. This supply and demand imbalance suggests further house price growth over the coming months. There is certainly no sign that the end of the stamp duty holiday will cool this hot market any time soon.
Michael Graham’s region includes homes in the most desirable parts of the countryside where prices have increased by 8.9% over the year to April 2021. In the first half of 2021, compared to the same period in 2020, we have seen an increase of 111% in our number of sales agreed, and a reduction of 30% in the time taken to sell a property.
If you own a country property and are considering selling, now is the optimum time to capitalise on these market conditions. Why not request a free market appraisal or give us a call today and let us connect your home with our London buyers?
If you’re a prospective buyer hoping to swap London life for rural new beginnings, we would love to hear from you too. The country homes below are listed for sale with us now and more can be found by visiting our Property Search page. We would love to help you make your 2021 moving plans a reality.