Housing market February 2021

The new data by Nationwide building society and mortgage lender confirms that, for the first time in six months, the house price growth is slowing down: it fell from 7.3 % in December '20 to 6.4 % in January '21. Average house prices fell slightly too (0.3%) between December ’20 and January ’21.

The change is linked to the sentiment amongst many industry leaders who, at the start of February 21, feel that the stamp duty holiday extension looks less likely.

The housing prices reached a four-year high in November 2020, which is largely contributed to the stamp duty holiday introduced in July 2020. The government’s temporary measure exempts buyers from paying the transaction tax on the first £500,000 of residential property purchases.

According to HMRC (December ‘20 report), year on year, transactions were 32.1% higher than in December 2019 (63.6% higher on a non-seasonally adjusted basis).

The buyers demand is still strong, according to the latest January assessment by Rightmove as well as many property professionals nationwide. The supply of homes coming onto the market in the last two months is still below the level demand, especially from the market segment which is moving for the change of lifestyle reasons. Wealthier city dwellers are moving to more rural locations, thus the spike in demand for larger homes outside London worth between £450,000 and £800,000.

Robert Gardner, Nationwide's Chief Economist, comments: 

“Indeed, the total number of mortgages approved for house purchases in 2020 exceeded the number approved in 2019, and house price growth ended 2020 at a six-year high, even though the economy was probably around 10% smaller than at the start of 2020, with the unemployment rate around a percentage point higher.

Looking ahead, shifts in housing preferences are likely to continue to provide some support for the market. However, if the stamp duty holiday ends as scheduled, and labour market conditions continue to weaken as most analysts expect, housing market activity is likely to slow, perhaps sharply, in the coming months."

A few more recent housing market facts:

• The latest Halifax house price index states that the average home still cost 5.4 % more than in January 2020.
• The latest Rightmove analysis shows that it is now taking 126 days from the time an offer is accepted until legal completion, just over four months. 
• Most of the sales transactions in the last 9 months have been by the existing homeowners rather than the first-time buyers.

For more information about London property available for sale contact Chase Evans sales:

Call +44 (0)20 7701 7000 or

Email:     newhomes@chaseevans.co.uk

Summary data source:

Halifax.co.uk

Rightmove.co.uk

Propertyreporter.co.uk

Mansionglobal.com