Over the last year we have unprecedented market conditions – with upward pressure on prices, exceptionally high demand and a record number of transactions.
According to Rightmove, in April 2021, 32% of properties sold for more than the original asking price. The portal also reported that housing market demand was 52% higher in April 2021 compared to April 2019. Despite increased demand, stock is still low, and Zoopla has reported a 21% decline in the year to mid-May compared to the 2020 average.
The latest figures from the Nationwide House Price Index show that house price growth in May was 10.9% – this is the highest level recorded since August 2014. Monthly house prices rose by 1.8% in May, following a 2.3% rise in April and house prices continue to increase as housing market demand outweighs supply, putting upward pressure on prices.
The imbalance of supply and demand has continued to push up prices – with demand skyrocketing and limited supply, especially for family homes with three or more bedrooms. Although the available properties for sale with three or more bedrooms was 50% lower in April 2021, the availability for properties with two bedrooms or fewer was down by 24%.
Market outlook
The property market outlook is positive – the stamp duty holiday, low interest rates, the availability of high LTV mortgages and the re-evaluation of housing needs following the pandemic has caused a spike in property transactions that no one could have predicted.
According to HMRC, around 117,860 transactions completed in April 2021. This is 21% higher than the April 2014 to 2019 average. In addition, mortgage approvals remain at a high level with 86,921 approved in April 2021 – this is 30% higher than April 2014 to 2019, and incredibly this is 439% higher than last year.
A Nationwide survey has revealed that these sales figures aren’t due to the stamp duty extension, but results from the re-evaluation of people’s housing needs following the pandemic as people want more space.
Zoopla has reported that £149bn of homes have sold (subject to contract) in the first 15 weeks of this year. With travel restrictions in place this summer the demand for new housing is expected to remain high throughout the summer. Zoopla predicts that completions this year will hit 1.52 million, making 2021 one of the busiest sales markets since 1959.
Finally, according to the latest RICS residential survey, agents are positive with 3-month price expectations showing a +51% net balance. Agents believe that upward pressure on house prices will continue over the next year.
Clyde Property is a leading independent, multiple award-winning estate and letting agent with more than 30 years’ experience in selling and letting property in Scotland. Just call your local Clyde Property branch today for friendly, impartial advice on finding your next dream home.
