LONDON (CU)_Over the past year, house prices in the United Kingdom surged at a record level, as the housing market of the European nation remained strong amid the COVID-19 pandemic. While many believed that the stamp duty holiday announced in July last year was responsible for the mini boom in the housing market, recent figures have shown that the withdrawal of tax breaks have failed to seriously dampen momentum. Recent figures show that in October, the average house price in the UK increased for a fourth consecutive month, reaching £270,000 for the first time, amounting to a 0.9 per cent from September.
According to a leading property advisor, while residential property values have risen across all areas of Great Britain, the biggest increases have been reported by markets outside London. Accordingly, the company revised its price forecast for the next five years upwards, as it anticipates the north-south house price divide to narrow during this period.
London-based property firm Savills says that the robust economic growth that is currently being recorded across the European nation, together with a shortage of homes for sales, is expected to increase house prices by 3.5 per cent next year. By 2026, the company anticipates this figure to reach as high as 13 per cent, the same growth that was recorded after the housing market reopened following the first COVID-19 lockdown.
In terms of regional markets, the real estate service provider expects a 2 per cent growth in London and an increase of at least 3 per cent in every other part of Great Britain next year. Higher rises of 4.5 per cent are being predicated by Savills in the Humber and the north-west and Yorkshire. By 2026, the company expects prices to rise by a whopping 18.8 per cent in both regions, although in London it would go up by 5.6 per cent.
“Given where we are in the housing market cycle, the north-south divide in house prices looks set to close further over the next five years,” Lawrence Bowles, a director of residential research at Savills, said. “There remains more of an affordability cushion beyond London and the south. The government’s levelling-up agenda has the potential to accelerate a rebalancing of the market but only if it gains meaningful traction.”
