Two key house price indices published in the last week show continued strong growth in the UK housing market. The UK House Price Index (HPI) for March 2021, shows a monthly increase of 1.8% in UK property prices, taking the annual price growth for the year to March 2021 to 10.2%. The average price of a UK property in March 2021 stood at £256,405.
The latest Rightmove House Price Index, based on asking prices on its property portal between 11 April and 8 May 2021, also shows a 1.8% rise compared to the previous month. It calculates annual growth to be 6.7% since March 2020, taking the average asking price of a UK property to £333,564.
Rightmove reports that demand is continuing to massively outstrip supply, with a 52% increase across the UK in buyer demand since April 2019. The north is experiencing the greatest supply problem, fed partly by new arrivals from other parts of the country. The HPI data reveal that Yorkshire and The Humber saw the strongest annual price growth of 14% in the year to March 2021. This compares with a much smaller increase of 3.7% in London over the same period. Rightmove reports very similar regional differences, with London recording only a 0.2 % annual increase. However, at an average asking price of £640,373, London prices remain significantly higher than most of the UK. The lowest asking prices are in the North-East and Scotland where prices stand at £164,025 and £170,633 respectively.
The shift towards larger homes, first seen during the 2020 lockdowns, is continuing. Family homes offering at least three bedrooms are in particularly short supply across all regions. Rightmove reports that agents in London and the North-East have 20% and 59% less stock respectively of this type of property than two years ago. This shortage is reflected in a 7.9% rise in asking prices for so-called “second steppers” property since March 2020, compared with a smaller 5.4% rise for first time buyer properties. The HPI figures show a similar trend, with flats and maisonettes recording the smallest annual price rise to March 2021 of 5.0% compared with 11.7% for detached homes.
Looking at local trends in Hemel Hempstead, the area saw an annual headline growth rate of 21.7% in the year to March 2021. This takes the total growth in the last decade to 74.7%. Total sales in the same period came to 920 which is a decrease of 37.2% compared with the previous 12 months. This is largely down to the market being shut in the early days of the pandemic.
Despite the forthcoming end to the stamp duty holiday which is being phased out from the end of June, Rightmove is anticipating the market will continue to be strong for the rest of the year. They add that there may be a gradual increase in supply as the vaccination programme boosts seller confidence and this could have a dampening effect on prices later in 2021.
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