Buyer demand has remained strong in the housing market even during the third national lockdown. This demand is continuing to support house price growth, with the north-west leading the way.
The latest index from Zoopla reveals UK house price growth has risen by 4.3% from January 2020 to January 2021. Demand for housing remains at 12.4% higher than this time last year, even during the third country-wide lockdown. This strong demand from buyers is continuing to come forward despite the imminent end to the stamp duty holiday.
Gráinne Gilmore, head of research at Zoopla, comments: “As the growth in demand continues to outstrip the supply of homes, it puts more upwards pressure on prices. We can see this in the +4.3% average price growth in the year to January, matching the highest level of growth seen in nearly four years.”
There continue to be regional variations in the UK housing market. Successive lockdowns has led to a number of people reassessing what they want and need from their homes. Changing work patterns, additional space and a better location mean new property preferences have emerged. And cheaper house prices outside of the capital are continuing to play a major role in these new trends.
North-west in high demand
House prices in Wales and the north-west of England led the way with prices having risen by an average of 5.6% and 5.5% on an annual basis. Zoopla’s index also reveals which cities are seeing particularly strong demand and growth.
Liverpool is at the top of the list, where average values have gone up by an impressive 6.8% since last January. Following closely behind, Manchester has seen a 6.3% rise in house prices. And Leeds is next with a 5.5% increase.
In recent years, the housing markets in these cities have been strengthening even before the current change in conditions. The economy and job markets in the north have developed with more people and businesses relocating to these areas. This in turn has supported investment and growth in the property markets of these regions.
Expectations for the rest of 2021
The stamp duty holiday has provided a major incentive for buyers. The strong appetite from buyers is expected to remain throughout Q1 as buyers continue to search for more space. Others are looking to make location moves due to the rise of remote working.
Gráinne Gilmore states: “Whilst January and February this year are often busier times in the market, this year both demand levels and sales agreed have been noticeably higher than usual.”
With the vaccine roll-out continuing to gain momentum and the roadmap of loosening lockdown restrictions revealed, there is expected to be more demand from sellers, who had put a pause on listing their properties during the lockdown.
Increased confidence and the gradual opening up of the economy will likely lead more sellers to put their properties on the market. This will also continue to support demand as they look for their next home. Zoopla forecasts activity to remain strong through the middle of 2021. During the second half of the year, activity and house price growth may slow down.