House Prices Could Rise By 3.5% in the UK Between 2022 and 2024

28 September, 2021 by Denzil Otieno 5 mins read Category:  Money

According to a prediction, the second wave of demand for greater rooms is expected to drive up house prices across the UK, with values rising by up to 3.5 percent per year between 2022 and 2024.

Hamptons also projected that more homes would be sold in 2021 than in any other year since 2007, following a record spike in activity this year as families sought larger homes during the epidemic.

Hamptons thinks that summer 2021 marks the “peak of home price rise” and that growth will decline over the next few months, with average prices in the United Kingdom ending the year 4.5 percent higher than at the end of 2020.

However, one of the causes generally attributed to the pandemic’s stronger-than-expected price increase – a race for space that has seen many purchasers prioritize houses with more extensive gardens and greater capacity for working from home – may be likely to persist some time.

Official home price statistics, along with data from confident analysts, suggested that the market had cooled following the partial end of the stamp duty vacation in England and Northern Ireland this summer.

Average UK House Prices Falls

According to the most current statistics from the Office for National Statistics, the average UK house price decreased by £10,000 in July compared to the previous month, while the yearly price increase remained at 8%. Many homebuyers raced to finalize their transactions before a significant stamp duty holiday deadline on June 30, and official statistics indicated that sales fell by nearly two-thirds in July.

However, new data suggests that the market is still booming, even though the stamp duty threshold returns to its pre-pandemic level of £125,000 on October 1.

Halifax, one of the country’s largest mortgage lenders, said that the average cost climbed by 0.7 percent in August, while Nationwide reported a 2.1 percent monthly increase in August, the second-highest in 15 years.

According to Hamptons, households will move home more frequently than in pre-pandemic periods due to flexible and remote employment and other Covid-induced shifts. It predicts that prices in the United Kingdom will rise by 3.5 percent in 2022, 3 percent in 2023, and 2.5 percent in 2024. That would imply a 13.5 percent increase between the beginning of 2021 and the end of 2024.

The State Agency’s Prediction 

According to the estate firm, the northeast of England will be the best performer throughout the time, with home prices rising by 6.5 percent this year and then by 4 to 6 percent every year between 2022 and 2024. 

On the other hand, London was expected to lag the rest of the UK over the next few years, with prices expected to climb by 1.5 percent this year and 1 percent in 2022, according to Hamptons.

According to several studies, strained affordability and the increase of flexible working have pushed many households to leave the capital or consider leaving.

The government declared the stamp duty vacation in July 2020 to prevent a market collapse during the first Covid shutdown. The first £500,000 spent on a house in England and Northern Ireland was tax-free until June 30 of this year, meaning a buyer could save up to £15,000.

The tax benefit was reduced on July 1, with the threshold at which the tax on property purchases began falling to £250,000, and this so-called “nil rate band” will be reduced to £125,000 next month. Wales and Scotland have already seen the end of the tax advantage.

Separately, the estate agency Knight Frank stated that the surge in demand for second houses that began after the first shutdown in 2020 was still going on since limitations on international travel had left many individuals looking for a place to get away from the city bustle.

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