When the pandemic shut down the UK in March 2020 a leading market analyst predicted property prices would fall by 20% in the following 12 months, whilst a leading estate agent was slightly more conservative albeit still foreseeing a best-case scenario of a 10% drop in values.
From March until June the property market was ‘frozen’ making it difficult for agents and developers to operate, however, those that remained agile managed to buck the trend, which saw prices up by 7.3% by the end of the year (a six-year high).
What this demonstrates is that when the chips are down the property sector always rolls up its sleeves and comes out on the other side typically better off than it would have been in ‘normal’ circumstances. One example of our own is the launch of a boutique scheme in Kenley, which we released on the Easter Bank Holiday, in the height of the pandemic, that sold in a matter of weeks. This demonstrated to us immediately that the domestic market appetite was as strong as ever, so we put our best foot forward and proceeded with the acquisition of a multi-million-pound office-to-resi project, as well as the launch of further schemes by the end of the year.
Moving into 2021 and further predictions of a cooling-off period, with a leading bank predicting a fall in house prices between 2-5% by year-end, were immediately quashed with the rush of activity, fuelled partly by the SDLT holiday, which saw the Treasury SDLT transactions rise by 168% in the first half of 2021 compared to the same period last year.
Despite a slight cooling following the end of the SDLT holiday and coming out of the typical property summer quiet period house prices have once again achieved record appreciation, with August seeing the largest monthly rise in 2021 at 2.1% totalling an increase of 6.8% in the year to date. Across the UK overall property values are up by 13.2% in the year to June 2021, the largest annual growth since November 2004, beating the records achieved in the great property boom of 2014.
This trend is unlikely to wane as the year comes to a close, with mortgage rates at an all-time low – some providers are offering a short-term fixed rate of 1%, which is unheard of in the UK – the return to offices now in full swing and the gradual return of international travel driving activity further.
At one of our new developments, we have had value proposals revised three times in the past two months, as agents see the huge rise in activity and predict even larger value growths.
However, as with anything, this can’t go on forever, so for those looking to maximise their asset values or achieve the highest possible price on their home, now is as good as time as any to enter the market and take advantage of the boom that has managed to clear the gloom that clouded the sector not even 21 months ago.