With most restrictions coming to an end and lockdown essentially over, people wonder what will happen to property prices. House prices across the UK have risen dramatically since the beginning of the COVID-19 pandemic, soaring at their fastest rate for 14 years. So, will prices continue to rise, stay stagnant or begin to fall as life returns to some sense of normalcy?
The most significant rises have been outside of London and the Southeast of England, such as South Wales, Cornwall, the Northwest, Yorkshire and the Humber, and the North of Scotland.
Why did the prices rise in these places?
As a result of everyone working remotely during the pandemic and many organisations offering to continue this afterwards, people began to move to more rural locations rather than continue to live in cities closer to work.
Many who live in flats or apartments with no outdoor space saw the downsides to this when they could only leave their homes for daily exercise. This led to many people wanting to move to a house with a garden or other outdoor space.
The stamp duty holiday boosted many house purchases as well, so people who may have moved at a later date took advantage of the financial incentive.
House Prices May Continue to Rise in Many Areas
The Royal Institution of Chartered Surveyors has predicted that house prices will continue to rise for the remainder of 2021 because of a lack of available properties and little let-up in demand.
Individuals who choose to work remotely from home will have no regular commuting costs over the long term and instead may choose to place this portion of their income into their home.
Many people who plan to continue working from home will move to larger properties to have a dedicated office within their homes.
The stamp duty holiday has now ended, and this was reflected in a 0.5% decrease in house prices in June. However, it is thought that this decrease will not be sustained.
Mark Harris, Chief Executive at mortgage broker SPF Private Clients, said low-interest rates, “cheap borrowing and affordability is giving buyers more purchase power, which is pushing up prices”.
The massive rise in house prices is proving to be costly for first time buyers, many of whom now find themselves struggling to afford to get on the property ladder.
With many people’s foreign holidays cancelled this year, the summer months, which are traditionally quieter in terms of property sales, look set to be busier than ever.
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