The UK property market continues to see strong house price growth. And while the sector typically faces a seasonal slowdown this time of year, demand will likely remain strong.
In the past few months, there has been a significant rise in buying and selling. Over the year to September 2020, the average UK house price increased by 4.7%, according to the latest UK House Price Index from the ONS and Land Registry. This is the highest level of growth since October 2017.
The data from this house price index further shows the strong growth the UK property market is seeing. The sector typically faces a seasonal slowdown this time of year. However, house prices and demand will likely remain strong even during the winter months.
Certain regions of the UK are seeing particularly strong house price growth. The west of England led the way with the south-west seeing the strongest house price rise at 6.4%. And the north-west followed with a 6% increase.
During the past four years, there has been a general slowdown in national house price growth. The south was the main force behind this stagnation. In September of this year, the average house price in London hit £496,000. This is a record high for the capital.
Demand remains high
The latest data from estate and lettings agency Chestertons shows the London sales market started its seasonal slowdown in October. However, enquiry levels remained 40% higher than last year and is at a five-year high. This illustrates the confidence in the market was still strong despite the second lockdown.
Guy Gittins, managing director of Chestertons, says: “The sales market will always slow as we approach the winter months and so the lower number of enquiries and registrations compared to September was to be expected.
“However, we are pleased to see that activity levels are still tracking well above last year’s figures and are at the highest levels for five years. The emergence of the second wave of Covid cases didn’t have any significant impact on demand.”
Figures from Chestertons also show that buyers remained motivated to find and secure a property as 23% more property sales were agreed in October compared to September. This is particularly interesting as September has traditionally been one of the busiest months for sales in the capital. Buyer activity typically drops off significantly in the run up to Christmas. However, this year is expected to be different as demand continues to swell.
Home priorities shift
As there have been the highest number of homemovers in over a decade, this shows people have been especially keen to move in recent months. Thousands of people’s work-life balances have changed since the start of coronavirus, and for many this may be permanent.
Spending so much time at home has shifted many homemover’s priorities. Having a home office, excellent internet connectivity or outdoor space are on top of most peoples’ agendas nowadays. This second lockdown will further secure people’s desire to move, which is expected to further boost housing market activity in the coming weeks and months.
Stamp duty holiday deadline looms
The stamp duty holiday, which is currently in place until 31st March, is also driving demand from buyers and investors. This tax holiday can save homebuyers up to £15,000.
After the announcement of the stamp duty holiday over the summer, confidence quickly returned to the UK property market. The tax holiday will keep the market moving in the coming weeks. Buyers and investors that are hoping to the beat the deadline are advised to act quickly.
Guy Gittins comments: “There was understandably a bit of concern amongst buyers and sellers at the end of October as a second nationwide lockdown became something of an inevitability. Interestingly though, people’s main concern was about having their move date delayed and potentially missing the stamp duty holiday deadline, rather than fear about prices dropping substantially, as was the case in the first lockdown in March.
“Now the race is on to complete the sales of those properties currently under offer, before the end of the year or at least ahead of the stamp duty holiday deadline.”
