Strong signs for the UK Housing Market in 2021
23rd March 2021
The UK housing market in 2021 will see growth of up to 4%.
North of England and The Midlands will experience the strongest expansion, so says national estate agency Savills in their annual housing market report, covering the next five years.
Despite the catastrophe wrought on many sectors of the economy by Covid-19 and the predictions of heavy job losses, the steps taken by the Chancellor of the Exchequer Rishi Sunak and the UK Government has kept the housing market buoyant.
Backed by the Stamp Duty Holiday and the mortgage guarantee scheme, 2020 saw house price growth of 7.3%. The desire of buyers to take advantage of the former certainly driving demand, even with periods where physical viewings were banned and the overall economy shrank by 10%.
As lockdown restrictions and social distancing measures are eased coupled with the UK’s much-lauded vaccination programme the predictions for 2021 again show movement in positive territory.
With the announcement of the extension to the Stamp Duty Holiday in the recent spring budget, Savills are forecasting growth across the country of up to 4%. However, they do warn of a possible slow-down from the start of quarter three, but foresee a bounce back at the start of 2022.
This recovery, it states will be driven by a period of sustained economic growth as the U.K. emerges fully from the Covid-19 pandemic and the shackles of European membership fully removed.
According to Savills, 2022 will see an overall house price growth of 5%. Looking forward the market will remain positive into the following three years with rises of 4%, 3.5% and 3% in the years 2023, 2024 and 2025 respectively. The full increase in average house prices for the term 2021 to 2025 delivering 21.1%.
Of this overall increase Lucian Cook, Head of Residential Research at Savills says
“Our analysis suggests average UK price growth of 20% is sustainable over the next five years without unduly depleting mortgage affordability.”
Good news for homeowners and we’d suggest the UK Government will act to further support first-time buyers. What shape that will take only time will tell.
Returning to the Savills report, it once again sees London and the South-East leading the charge in growth in the UK housing market in 2021. However, moving forward they see other regions showing strong growth also. The North West, Yorkshire and Humber and indeed the Midlands are all forecast to increase strongly to the period 2025 by up to a total of 28.8%.
What does this mean for our strategy and focus, that being London and the South East of England. Nothing changes is the answer, we can see clearly positive growth and will firmly stick to our known areas of expertise.
Chasing a few percentage points in areas and regions of which we have no knowledge be a folly. Proof is easy to hand, our development in Kingston-upon-Thames, Riverside Place has now completed sold out, a full six months prior to completion and the interest being generated by our prestigious project on Cheyne Walk in Chelsea has been nothing short of staggering.
There is little doubt the Covid-19 pandemic has changed the economic landscape of the country. Some sectors have been decimated and sadly thousands will have already or will in the future lose their jobs because of the virus. But we believe the country as a whole will come back stronger than ever and look forward to seeing Savills predictions for the UK housing market in 2021 and beyond be delivered or bettered.
If you’d like to know more about our current developments in Kingston-upon-Thames, Cheyne Walk, Chelsea or any of our schemes in South East hotspot Margate please don’t hesitate to get in touch. We are also looking for additional HNWI or SI investors who would like to partner with us as we expand and scale the operations of Store House.