Britain’s housing market boomed as people sought bigger houses and jumped on a temporary reduction in purchase taxes
British house prices are set to grow an average of four per cent in 2021, according to property UK website Rightmove, despite the looming end of a tax break and forecasts of rising unemployment.
Rightmove said asking prices for property first advertised between 8 November and 5 December were 6.6 per cent higher than a year earlier, after Brits “reprioritised housing needs high on their life agendas” during the pandemic.
Britain’s housing market received an unexpected boom after the first raft of Covid restrictions were lifted in June, as people sought bigger houses and jumped on a temporary reduction in purchase taxes.
In July, the government announced a stamp duty holiday for properties purchased for under £500,000, leading to a build-up of transactions over the last few months as buyers pushed to complete sales before the deadline.
The tax break is due to expire at the end of March, but Rightmove said underlying demand and cheap borrowing costs were unlikely to dampen activity.
There’s likely to be a lull in quarter two unless the stamp duty holiday is extended, but for many buyers its removal will not be make or break, though may lead them to reduce their offers to a degree, Rightmove’s director of property data, Tim Bannister, said.
He added: Our 2021 forecast of a four percent price rise is more conservative than the unsustainable 6.6 percent national average seen this year.
The Bank of England in October reported that lenders approved the most new mortgages since 2007 this year, while mortgage lender Halifax said house prices had risen by the most since 2004 in the five months since lockdown ended.
