UK prices soared by 10.2% annually in March which meant buyers were forking out, on average, £256,000 for a property during the month, the House Price Index from the Office for National Statistics has revealed
This was £24,000 higher than the average house price in March 2020 and highlights the extent to which both the pandemic and stamp duty holiday have impacted the property market.
Indeed, estate agents revealed how many buyers were looking to move to homes in commuter belts or further out of cities as the pandemic altered the way they worked.
Nick Leeming, chairman of estate agent Jackson-Stops, said its branches in ‘quintessentially English’ countryside towns such Chichester, Taunton and Chipping Camden continued to see the highest number of new applications, alongside London’s prime commuter-belt towns, including Sevenoaks, Dorking and Cranbrook.
This was because people wanted more space and access to nature, while committing to either longer term home working or a hybrid working model.
He added: “The number of new applicants that registered with our branches in March was on par with the number that signed up when the market reopened last June.
“Given the strength of demand, and the fact this is linked to fundamental shifts in people’s lifestyle priorities, we don’t see the market cooling in the near future.”
Regional breakdown
Wales experienced the highest increase in prices with growth of 11% which took the average price up to £185,000.
In England prices increased by 10.2% to reach an average of £275,000 and in Scotland a 10.6% rise meant the average price tag escalated to £167,000. Northern Ireland’s 6% rise in prices meant the average value was £149,000.
London, once again, experienced the lowest annual growth for the fourth consecutive month – prices increased by 3.7% in the capital, according to the data.
The North East and Yorkshire and Humber experienced the biggest growth – with prices soaring by as much as 14% in the North East.
Conveyancers ‘overwhelmed’
But many believe the current buoyancy will not last and have predicted a correction is on the way later in the year.
Lloyd Davies, managing director of legal practice, Convey Law, said the property market could ‘fall off a cliff soon’ when the ‘rush to complete’ before the stamp duty holiday died down.
And he revealed how solicitors dealing with property transactions had seen a rise of around 30% in volumes, triggered by the Stamp Duty holiday. This had impacted the speed of the conveyancing process and put huge pressure on an already overwhelmed property industry.
He warned: “Currently, buyers are rushing to complete before the end of the Stamp Duty holiday in June to potentially save thousands of pounds.
“The government has already acted to taper some of the savings until September but that will not be enough for many purchasers.
“I believe we will see aborted transactions and disappointed house buyers this summer and autumn unless the government looks at a much longer form of SDLT tapering.”
First-time buyers
There were also concerns the current house price inflation was worsening affordability problems for first-time buyers.
Kevin Roberts, director, Legal & General Mortgage Club said while the stamp duty holiday had helped existing homeowners and those purchasing high value properties, for those wanting to buy for the first time, the hot housing market could actually be making it more difficult to step onto the ladder.
“For these people, there is good news as there are schemes currently available which can help make it easier to buy, by reducing the deposit and affordability requirements to securing a home,” he added,
“Help to Buy and Shared Ownership are two great government-backed options. Mortgage lenders can also help and those wanting support with the mortgage affordability process may wish to speak with an adviser about how a family-assist mortgage could benefit them.
“Of course, along with these initiatives, there is also a critical need to boost housing supply in the UK. It is vital that we begin hitting our target of 300,000 new homes each year to ensure there are affordable but also high-quality and sustainable homes for generations to come.”
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An absolute joke. Been saving for years for our first home together. Can’t even live together because renting is paying someone else’s mortgage for them. People are offering a ridiculous amount over the asking price for properties. They’re offering more than the property could ever possibly be valued at for a mortgage valuation. So normal first time buyers can’t possibly compete because how could we make up the difference between the mortgage offer and what we would have to pay to actually secure a property.
Greedy estate agents and driving up the prices and lying to potential buyers. You have to show them proof of funds before they will even let you view the property so they know exactly how much money you have.
New builds are a joke, they’re not affordable for first time buyers and half of them can’t be sold to you unless you currently live in a council house and have somehow managed to save enough to buy a house!? The other half go to the buy to let landlords to be rented out for £1000 plus a month.
If we get outbid on another property by some rich tw&t who is buying a property in cash I’m going to scream.
I’m a first time buyer and have now lost five houses in a row to buy to let landlords etc. I recently bid 40k over the asking price to secure my dream home only to find someone else had bid 85k over the asking price to secure it- a good 60k over what any mortgage company would ever value the house at. I have given up now. My wife burned an entire years holiday taking half days off to view houses (we’ve seen tens of them now) so we are out of options. For first time buyers it’s a completely disgusting market totally dominated by buy to letters etc.
Cant agree more. The government has screwed us all over
And that is exactly why house prices will fall , without first time buyers the housing market cannot continue and this pace. You will see it decline towards the end of this year.
Those who wait will be rewarded I am renting as I sold my house 2 months ago as prices were going upwards too quick.
What goes up must come down !
I live in chichester, the town is being ruined by over development and demand for over priced properties , there is a real rise in crime from the influx of people moving here, waiting lists at the local hospital, GP Surgeries and schools, the area is being spolit and has no sense of communty anymore, its just a genenic town full of people mostly ex londoners who are property rich moving here with no local family background or interest other than wanting to buy into a lifestyle, the amount of shit new housing estates being built is just horrible , its ever ending, a few quid to the dodgy district council if your a house builder will get you everywhere
Until last year I was in the fortunate position whereby I could afford a £200k property as a cash buyer via an inheritance once the property sold. Having watched the market for the past 2yrs or so I’ve seen some great properties come and go in that price range while waiting for the property to sell. Since everything has gone up 11% I see absolutely no value to be had in that range and wouldn’t even entertain such valuations. I’m also a first time buyer so stamp duty is irrelevant to me. As I can’t get a mortgage it looks like I’ll be forced to rent until the bubble bursts.