2021 has been a great year for the UK property market, with prices outperforming record growth seen in late 2007. What sets 2021 apart from this previous era is that growth has been stable, as banks continue to tread carefully following 18-months of economic uncertainty as a result of Covid.
One of the sectors largest portal’s (Zoopla) has predicted we will see around 1.5 million property exchanges by the end of 2021, and this has only been possible as a result of confidence in the UK market. With the inclusion of a sizeable stamp duty holiday, along with low interest rates from most lenders, the momentum is expected to continue into 2022.
We can all admit that the last 18-months has been challenging, many experts expected 2021 to be a real watershed year for property prices. And yet, we’ve seen some of the strongest growth in decades. You could argue that a bright future is standing in front of us, as global economies continue to reopen.
So how do we proceed?
Let’s start with the headline figures. Over £473bn of new sales were agreed in 2021, an increase of over £95bn from the previous year. Demand from the market is also around 30per cent higher than over the same period in 2020. And finally, UK house prices are expected to see further growth, with the Northwest seeing around a 10per cent increase.
These results would indicate we can expect confidence growing further in the sector, with stable interest rates encouraging financial institutions to lend more for less.
Although the UK has seen some of the strongest annual growth on record, it’s important to understand how this relates to each individual region. For instance, house prices in much of the north have grown by around 10per cent per annum. In the south it’s a slightly different story, with some areas actually experiencing negative growth. From a national perspective we can expect around a 4per cent collective increase over the coming 12 months.
The fastest-growing market will be found in the North-West, where investment in large infrastructure projects is helping boost the size of the local population. Manchester has seen incredible levels of growth over the last 15 years, with the skyline constantly evolving through strong rental demand. Although prices in the city are starting to slow, it still remains one of the best markets to invest.
Leeds, Liverpool and Sheffield maybe a few years behind, but from an investors perspective they are prime locations to build another tranche of a property portfolio. With lower entry levels and stable rental demand they are ripe to follow Manchester’s growth.
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