High Demand for Property in Spring 2021
Surging Demand for Property in Spring 2021
Data from Rightmove suggests rising interest in UK property for Spring 2021
Rightmove has reported a record number of people enquiring about properties. The number of potential buyers interacting with available properties on Rightmove rose by 34% compared to spring 2020 – which was already considered to be a strong period for the property market.
Increasing interest has placed pressure on UK house prices, which have already risen by £2,484 or 0.8% this month. Industry bodies have already revised their property price predictions upwards. Experts from Rightmove claim that there are not enough houses to meet demand as so many sales have been agreed over the past few months and interest is showing no signs of easing. Currently, demand is outstripping supply by the largest margin ever seen over the last ten years. This has allowed sellers to dictate the asking price, as they know there will be buyers and this could be one reason for the increase in house prices.
Demand for UK property not expected to slow any time soon
The concern that house prices will suddenly drop, and the property market will stall have been largely allayed, partly due to the extension of the stamp duty holiday and partly because the surge of interest in buying due to backlogs caused by lockdown restrictions is not slowing down. Demand is expected to be sustained in the long term as the stamp duty holiday has been extended until September, and from April government legislation allows lenders to offer 5% deposit mortgages.
Although house price rises may be curbed by stricter lending criteria brought in by the Bank of England in 2014, experts are standing by their predictions of house prices rising by 4% this year.
The UK property market seems to be currently working in the sellers’ favour. High demand and low supply have allowed sellers to dictate prices and with nearly two in three properties on agents’ books sold subject to contract, buyers are seemingly willing to pay. This high activity demonstrates a certain resilience within the housing market, as demand and prices climb even in the face of adverse conditions such as a pandemic and economic uncertainty.
What do UK house price increases mean for investors?
Whilst the current situation looks good for sellers, what does it mean for investors? Those considering property investment in the UK can be encouraged by this news. The UK is the fourth most valuable real estate market in the world and the second most traded commercial real estate market. Its transparency and maturity attract investment from funds and individuals alike. Despite the pandemic, they are still investing in UK property. Just days ago, the Singaporean property investment fund Mapletree announced that it will invest in seven Grade A office spaces across Europe, three of which will be in the UK (Manchester, Aberdeen, and Bristol).
It is a good sign if large corporations and funds still have an appetite for UK property and are actively investing. Even though property should be considered as a long-term investment, house prices increasing in difficult climates proves the resilience of the market and signals scope for future growth - which is a motivator for funds. Investors from Hong Kong and mainland China account for 15% of international buyer home sales above £1million across prime central London and 20% of deals above £10 million. As the UK has planned to offer almost three million Hong Kong citizens UK visas, there is a chance that investment in London’s prime property market could increase further.
Individual investors looking to purchase property from the commercial sector such as student accommodation investments, or who want to learn more about housing supply vs. demandshould get in touch today. Our investment consultants can provide guidance on the UK housing market and present opportunities within it.
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