Despite both Brexit and the international Covid 19 pandemic, house prices have continued to rise in the UK. In fact, they have risen at the fastest rate since 2014. By December 2020, house prices in the UK had increased by 8.5% with an average house price in the UK increasing to £252,000.
The increase in market values is thought to have been driven – rather ironically, by a combination of the pandemic and the UK Stamp duty holiday, that’s in place until March 31st 2021. This holiday means that no stamp duty is payable on homes of up to £500,000 in value.
The pandemic and subsequent ‘lock-downs’ have meant that we have had to remain at home – to include those working in none - essential services and industries. The demand for more space, for home offices, a safe – contained - outside area and the need to relieve the claustrophobic feeling created when all family members are at home throughout the day has pushed prices up.
Estate Agents ‘Rightmove’ have predicted a further increase of at least 4% during 2021. However, Halifax, Britain’s biggest mortgage lender has predicted a fall during 2021 of between 2 and 5% as the stamp duty holiday ends and the impact of unemployment – resulting from the pandemic – catches up with the economy. BUT – these are merely predictions for the future and whilst they’re educated guesses, the truth is no one truly know what will happen with the budget just around the corner (3rd March) and possibly an increase or a reduction in lock-down restrictions!
Whilst your home should be very much viewed as your home – rather than purely as an investment, what we all need to keep very much in mind is that since ‘Halifax’ began tracking house prices in 1983, during the last – almost 40 years, house prices have risen nationally by 428%! Even when inflation has been taken into account, this still represents an increase of 101% (124% in London).
Whilst the UK property market will inevitably experience ‘peaks’ and ‘troughs’ these figures very much indicate that buying a UK home is very much a good long-term proposition.