UK property boom set to continue as economies unlocked

LONDON: Britain’s housing market boom is set to continue as government support for the tumultuous market continues and those who have managed to save money during lockdowns seek more space to life, according to a Reuters poll.

House prices rose at the fastest annual rate for nearly 14 years in March, official data showed last Thursday, after a tax cut and a mortgage guarantee scheme for first-time buyers further fueled a sharp increase in activity.

Prices will rise 5.0% this year, according to the May 11-21 survey of 21 real estate market experts, a sharp increase from a February survey that predicted they would stagnate. Next year and in 2023, they will increase by 3.0%.

“The aftermath of the pandemic will likely see the strength of the housing market in 2022, due to changing lifestyles, the desire for a fresh start and tens of billions of ‘accidental savings’ made during the pandemic , much of which is likely to find its way into the housing market, ”said Mike Scott of online real estate agent Yopa.

Britain has suffered the highest number of Covid-19-related deaths in Europe and thousands have lost their jobs. However, with much of the non-essential service and retail sector closed for most of the past year and citizens encouraged to stay home, those who remained employed found their spending to be significantly reduced and were able to save more.

When asked how the risks to their forecasts were skewed, 11 in 14 said they were more on the downside. A slim majority – eight out of 14 – said activity was more likely to slow than accelerate in the coming year. “This year’s momentum will continue as the economy recovers very strongly. We need to be concerned about 2022, ”said Russell Quirk of real estate agent Keller Williams.

Prices in London, long the hotbed of foreign investment, are expected to lag behind the domestic market and rise 3.0% this year. Next year, they will increase by 2.5% and then by 3.0% in 2023.

“London is expected to experience relatively lower house price growth than the rest of the country as homebuyers prioritize space and take advantage of the flexibility offered by new remote working standards,” Harvir said. Dhillon at Experian.

Many Britons have sought to buy larger homes with gardens in less urban locations as they work more from home, the Office for National Statistics said.

But demand is quickly returning for apartments and other downtown properties, which buyers had avoided during the coronavirus pandemic, an investigation by the online real estate portal Rightmove showed on Thursday.

“People who are starting to venture into their local main streets and experience the buzz of their city centers again, along with greater availability of mortgages for first-time buyers, mean that city centers are organizing. feedback if needed, ”says Rightmove’s real estate data manager, Tim Bannister, said.

During the lockdowns, most office workers were working from home, and many large companies have said they plan to expand this option, or at least switch to a hybrid model, once the restrictions are lifted.

So when asked how the demand for office space would evolve over the next few years, eight respondents to a supplemental question said it would decrease and two said it would decrease significantly. Four said it would increase moderately or significantly.

“We’re seeing a structural review of office space across the country as more people work from home for at least part of the week,” said Gary Styles of GPS Economics.

The stamp duty – a tax on real estate sales – was cut by Finance Minister Rishi Sunak last year and the hiatus, which was due to end in March, has been extended. The first £ 500,000 ($ 710,700 or RM 2.94 million) of any property purchase in England or Northern Ireland will remain exempt from stamp duty until the end of June, and there will be a deductible of £ 250,000 (RM 1.46 million) until the end of September. ─ Reuters