Rightmove data reveals asking prices are finishing 6.6% up on 2019, illustrating the unanticipated momentum seen in the property market during a year of uncertainty. What are house prices forecast to do in 2021?
The latest house price index by Rightmove shows asking prices increased by nearly 7% in 2020. Additionally, all regions of the UK saw prices rise this year.
This further backs up how the property market has remained strong even through the challenges and uncertainty that came with navigating the COVID-19 pandemic. There have been record levels of property sales and an unprecedented amount of demand.
In the index, Rightmove states: “Pandemic-related uncertainties have been around for nearly a year, and Brexit uncertainties for far longer, and record activity month after month has proved that movers are willing and able to act on their new or existing housing priorities.”
The stamp duty holiday “undoubtedly” added extra momentum to the property market. Throughout the year, demand continued to exceed supply as buyers are rush to beat the stamp duty holiday deadline. This demand to move will spill over into 2021 as people’s work-life balances have changed. Many hope to move into homes that better suit their changed lifestyles.
The north leads the way
The north of England performed particularly strongly throughout 2020. Rightmove’s house price index revealed the north-west saw the highest average change in asking prices with a 10.6% annual increase. The north-east followed with a 9.1% rise, while Yorkshire and the Humber saw the third highest annual change at 8.8%.
Despite the strong asking price growth, the northern regions are still home to some of the most affordable property prices. This area will likely remain particularly appealing for homebuyers and investors moving forward in the next year.
The north-east has the most affordable house prices with an average asking price of £159,381. Prices in Yorkshire and the Humber sit at £207,156. The north-west is only slightly more expensive with an average price of £214,840.
Housing market predictions for 2021
While uncertainties remain for 2021, the UK property market will continue to show its strength. Rightmove forecasts the national average asking price to increase by another 4% in 2021.
Tim Bannister, director of property data at Rightmove, comments: “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 behaviour we are confident that the housing market will continue to outperform general expectations next year as it did this.”
This is due to more people having reprioritised their housing needs. Moving home will likely remain at the top of many people’s agenda who have been driven to rethink their accommodation in the wake of COVID-19. Many are looking for larger properties with access to outdoor space.
The beginning of 2021 is likely to be busy, especially as the stamp duty deadline approaches. In the report, Rightmove says: “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 acted.”
Then, the sector may face a slowdown in Q2. However, the property portal projects modest price growth throughout the rest of the year. This is predominately due to ongoing demand, increasing mortgage availability and affordable interest rates.
Tim Bannister explains: “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 continued positive market sentiment that will outweigh the economic, political, and health challenges ahead.”