House prices predicted to rise in 2021

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House prices predicted to rise in 2021

National average house prices will grow by a robust four per cent in 2021, according to Rightmove.

There is strong evidence that people will continue to have their reprioritised housing needs high on their life agendas, according to the online property portal.

The unexpected market momentum of 2020 overcame the unknowns of the pandemic and associated economic fallout, and though headwinds and uncertainties remain, demand for housing and buyer affordability appear to be strong enough to outweigh some of these dampening effects, it reports.

Rightmove does however predict that the price rises will be at a slower pace than this year, which finished up by 6.6 per cent (up by £19,920 to £319,945) despite a small monthly fall of 0.6 per cent (-£2,080).

The stamp duty holiday has undoubtedly added some extra momentum, but buyer demand was already very high prior to its announcement in July.

And it remains remarkably resilient at 53 per cent higher than this time a year ago, despite the decreasing likelihood of completing a purchase by March 31 if it is agreed now.

Tim Bannister, Rightmove’s director of property data says: “2021 has a lot of variables, and so is not an easy one to call, but with Rightmove’s unique leading indicators of buyer and seller behaviour we are confident that the housing market will continue to outperform general expectations next year as it did this.

“Our 2021 forecast of a four cent price rise is more conservative than the unsustainable 6.6 per cent national average seen this year.

“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 to compensate for the higher tax, and indeed many sellers may be prepared to help to mitigate their buyer’s financial loss.

“First-time buyers will remain largely exempt, so in most cases will be no worse off.

“The maximum savings of £2,450 in Wales or £2,100 in Scotland are considerably less decisive than the £15,000 available in England for a house costing £500,000 or more, which does however only apply to a small part of the market.”