House prices set to soar as buyer demand shows ‘no signs of abating’
MARC DA SILVA
A significant increase in residential property prices has been forecast by Reallymoving as demand rom buyers continues to heavily outweigh supply.
The comparison site predicts the UK housing market will remain buoyant with prices set to increase by an average of 2.9% in June and 3,7%, when compared with the corresponding period last year.
Despite warnings from agents and surveyors of limited new supply, activity remains exceptionally strong with conveyancing quote volumes in April at around 60% higher than normal levels for the time of year.
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 – see below.
Stamp duty savings may have been wiped out by price rises, but buyers are undeterred, with a large proportion having accrued substantial savings during lockdown and in a position to review their location thanks to permanent flexible working arrangements.
Borrowing costs remain low and those with plenty of equity are in a strong position to move up the ladder to a property that better meets their new requirements.
Annually, prices have remained in positive territory since September last year, with annual growth accelerating in the run up to the New Year and then slowing in the first few months of 2021. From June annual growth will begin to rise strongly again based on deals agreed this spring, with prices in June 6.5% higher than a year previously, and in July 7.8% higher year on year.
Rob Houghton, CEO of reallymoving, commented: “Looking ahead to the summer we’re continuing to see an exceptionally strong performance from the housing market across the UK, with buyer demand showing no signs of abating.
“A shift in the priorities of homebuyers has resulted in strong demand from equity-rich homebuyers higher up the ladder who, freed from their daily commute, are able to look further afield for a home with the kind of space and location they’ve long dreamed of.
“Backed by lockdown savings and encouraged by rock bottom interest rates, many people are determined to secure a home that meets their new needs, despite fierce competition – and it is these movers who are driving sharp increases in average prices. Despite this, first-time buyers continue to maintain a market share of around 55% – which could rise further now the government-backed 95% loans are available.”