UK Property Round Up for 2021
The UK property market in 2021 enjoyed a record year, with house prices growing faster than most had predicted. Rightmove have described the last 18 months as “frenzied” with the pandemic continuing to impact both demand and supply.
Stamp Duty Holiday
One of the major contributing factors to this has been the Stamp Duty holiday, which was in place for much of 2021. Announced in July 2020, the holiday saw the threshold for England and Northern Ireland’s Stamp Duty Land Tax raised from its usual level of £125,000 to £500,000. After an interim reduction, this fully ended on 1st October 2021, with SDLT again payable on properties valued above £125,000.
Property sales topped £473bn, beating the 2020 level by £95bn. Whilst house price growth has slowed slightly in the last two months due to standard seasonal factors, annual house price growth is likely to sit at 7.1% for the year. This means the value of an average home in the UK sits at £240,800: a £16,000 increased compared to last November.
Rental Market Demand Grows
As pandemic restrictions eased, rental demand in city centres once again increased. Average rental growth was at a 13-year high by Q3 2021.
This has combined with a long-standing undersupply of rental properties in the market to make the UK property market highly attractive to buy-to-let investors.
Even central London, where recent renal demand has been low, has seen the first signs of recovery. Nonetheless, it’s left behind by regional towns like Manchester, Birmingham and Liverpool.
Predictions for 2022
It would be surprising if 2022 saw the UK property market continue to boom quite so startlingly. But, with so much recent volatility, experts aren’t ruling out another record year!
Savills are predicting very strong growth across the country. They estimate the North West will see house prices increase by 4.5% with a 5-year growth estimate of 18.8%. The West Midlands is likely to see slightly less growth, although year-on-year growth is still excellent at 4.0% and 5-year estimates point to a healthy 15.9% growth.
Rightmove are predicting house prices will increase by 5% in 2022, continuing a 45-year trend of capital growth for property in the UK.
Zoopla are more cautious, suggesting a house price growth of 3% UK-wide in 2022. Of course, this is an average and doesn’t highlight the regional variations seen across the country where areas like Wales, the North West and the South East will likely enjoy greater growth.
Investors can still make great returns in the UK property market. Plus, with interest rates on mortgages still favourable, 2022 represents an excellent opportunity to invest.
If you’d like a tailored discussion around your property investment options for 2022, get in touch today for a personal review.