The Coronavirus-enforced second lockdown throughout November didn’t have much of an effect on the UK housing market, with property prices rising at their fastest annual rate in almost 6 years.
Unlike the first lockdown seen in the spring of 2020, the market remained active throughout the second lockdown, with pent-up demand and buyers eager to take advantage of Stamp Duty savings contributing to rising prices.
The latest signs of the resurgence came from the Nationwide Building Society and showed property prices increased by 6.5% in the year to November 2020 – the fastest-growing rate since January 2015.
The average residential property in the UK is now valued at £230,000, with prices up by 0.9% between October and November. This increase marks the fifth consecutive month of growth according to Nationwide.
Reflecting on the data Simon Gammon, managing partner of Knight Frank Finance told the Financial Times: “The nation is engaged in a mass rethink over where to live following two lockdowns… activity has been particularly strong in countryside markets as buyers seek better access to green space.”
Positive property market trends
Homebuyers and property investors alike are taking advantage of the government’s Stamp Duty holiday – set to end on March 31st 2021 – and low interest rates. To keep the market moving, experts have already called for the government to extend the incentive to help future buyers.
However, it is not just sales that have seen a boost over lockdown 2.0. Encouraging trends in the rental market saw the average rental price for a new tenancy in the UK rise by 2.9% (up to £974 pcm).
According to data released by HomeLet, London once again saw a negative trend in tenant demand with 4.4% decrease in the year to November 2020 – marking the sixth drop in annual variance in subsequent months.
Investors, therefore, have a greater chance of securing stronger tenant demand from the private rental sector in areas beyond the capital to the regions.
The latest UK house price and rental figures provide further evidence of the strength of the property market despite a second lockdown. With news of the roll-out of a vaccine and the hope of life returning to normal, investors who wish to enter the market may wish to consider options before the government’s Stamp Duty holiday comes to an end.
For more information about property market trends and opportunities in the UK, contact Town Square Invest.