House prices have been rocketing since the start of the pandemic, as people have sought more space, saved more money and taken advantage of tax breaks on buying a home.
Households have been unable to spend as much money as usual, allowing those that have still been in work to save up for a deposit.
After the property market was temporarily paused in March last year, activity surged, with record sales.
The average sale price of a home in England jumped 10.2 per cent in a year from the start of the pandemic in March 2020.
Now the UK residential property market’s first £100 billion summer is on the horizon.
A forecast, by consultancy UK Residential Research, which takes the current trajectory of the housing market and applies it to the rest of summer months, estimates that there will be 420,000 sales in the UK across June, July and August at a total spend of a record £107bn.
This will make this summer the highest grossing quarter in UK residential market history, and is in stark contrast to previous years. Throughout the past half decade, total spend from buyers during the summer months has averaged £69 billion-per-year, a figure that comprised a little over 300,000 sales.
“The reasons behind the buying bonanza – with the most exchanges and highest total sales value on record – are threefold. The stamp duty extension to the end of June means that during the quarter eager buyers and sellers will look to force a deal through.
“This, combined with the increased financial stability many buyers are feeling as we unlock from coronavirus, and the well-documented supply constraints in the UK market, means we can expect to see demand swallowing up available stock, pushing up prices but not to the extent that it will affect transactions.”
The Government has set a clear priority to help more people onto the housing ladder through its Own Your Home campaign. The campaign puts the spotlight on six Government-backed support schemes to allow people to access some form of home ownership.
The forecasted spike in activity this summer will be particularly evident in the north of England, which is predicted to see circa 100,000 sales – around 25 per cent of the total UK.
However, with interest rates remaining very low, some analysts are predicting that prices are set to continue on a seemingly relentless upward march.
The situation also raises questions about how sustainable it is for property prices to rise faster than wages.
All of these factors mean there is lots to consider for anyone thinking of buying or selling a property.
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