The residential property market is hitting new records. According to the Office of National Statistics (ONS) UK average house prices increased by 10% over the year to March 2021; this is the highest annual growth rate the UK has seen since August 2007.
Both prices and the number of sales completions went up. According to Zoopla’s forecast, the number of completions will reach 1.5 million this year – the highest level since 2007!
Several factors added up to this boom:
- Stamp duty holiday was introduced in 2020 and then extended till the 30th of June 2021;
- The base rate was brought down to 0.1% by the Bank of England in March 2020;
- The 95% mortgage guarantee scheme was launched in April 2021;
- The massive increase in the money supply was made by the Government and Bank of England to support business and people during the pandemic;
- Properties supply shortage. According to Zoopla, the stock of homes for sale in April was 20% lower than in 2020 whereas the demand went 29% up.
Central London is the only region in the UK where some properties went down in price. But even there the number of homes put under offer this year was at the highest level for any April over the last eight years, according to LonRes. Buyers understand that when prices go down, it’s a good point to enter the market for investors with long-term strategies. The current spike may be just the beginning of the new London housing boom.
Such turbulent events on the property sales market created an opportunity for tenants. In London the rental prices went down by 9.4% in March 2021 to March 2020. Across London, rents are at their most affordable levels in a decade. In Central London, achieved rents on some homes are 20% down. Prime properties become more affordable to a wider group of tenants. So, if you were considering renting a flat in Central London, it’s a good time to do it now.