According to the real estate website Rightmove, the UK's housing boom is expected to last for another year.
In its latest national report, the company predicted that property prices would rise by a further 4% in 2021 as housing remains higher on buyers' agendas than the uncertainties caused by the COVID-19 crisis.
It said that in the long run, this year's 6.6% increase in property prices would be 'unsustainable', but demand and affordability would still be powerful enough to drive growth - albeit at a lower level- in the new year.
2021 has a lot of variables, and so is not an easy one to call, but with Rightmove's unique leading indicators of buyer and seller behavior, we are confident that the housing market will continue to outperform general expectations next year as it did this.said director of Property Data comments, Tim Bannister
Compared to December 2019, buyer demand is more than 53% higher, despite the fact that movers are waiting longer to complete sales- meaning many will miss out on the stamp duty holiday partly responsible for fuelling the property gold rush.
The Treasury announced the stamp duty holiday in July, nixing taxes for buyers of property under £500,000 until March 2021.
As protective COVID-19 measures froze the UK economy's gears over the summer, the temporary tax holiday was hoped to buoy up cash flow by encouraging high-value purchases.
Rightmove said it expected the first few months of 2021 would be exceptionally busy, as buyers try to take advantage of the tax holiday before it ends in March and try to get the year off to a positive start.
The New Year is typically a time for resolutions for the year ahead, and many will see it as an opportunity to draw a line under 2020, which may well include a fresh start in a new home for those who have not already actedChairman of estate agency Jackson-Stops, Nick Leeming, seconded this view.
He encouraged buyers to close on sales as soon as possible if they wanted to take advantage of potential savings on stamp duty:
We are expecting the first months of 2021 to be particularly active as buyers try to squeeze in their deals before March 31st. Those looking to make savings on the stamp duty holiday must act now; we are advising any serious house hunters to have their offers in by January latest.Said Nick Leeming
As well as buyers being keen to put 2020 firmly in the past, Rightmove's Bannister pointed to rock-bottom interest rate luring in property shoppers who are looking for more affordable mortgages:
Interest rates remain at near-record lows, and we expect greater availability of low-deposit mortgages at competitive rates next year. These two factors will help to oil the wheels for home purchases by the 'accidental savers' who have collectively saved £100 billion that they couldn't spend during the pandemic restrictions. With the expectation of a return to more normality in the second half of 2021 and a likely 'fresh start' mentality for some, there are sound reasons for the continued positive market sentiment that will outweigh the economic, political, and health challenges aheadNick continued
The property website said that coastal and rural areas were likely to see the most substantial rises into 2021, as people continued to turn their backs on city-living.
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