The UK house prices forecast Autumn 2021 and beyond
The UK house prices are to balance out after the summer peaks, with London property price growth lagging behind the rest of the country over the next 4 years.
The recent property market study indicates the UK housing market to cool down after a record-breaking, challenging year.
There was a record-high number of purchased homes in H1 2021 since 2007. The total number of transactions reached 1.5 million deals in the UK.
Past property trends
The pandemic-related issues and numerous lockdowns boosted the shifting work-life priorities of buyers. Together with the supporting initiatives (such as the stamp duty tax holiday), they have driven the property market boom in the UK. And that is despite various restrictions and financial uncertainty.
Partly because of the wide implementation of remote work, a lot of families decided to move out from cities in favour of spacious suburban homes with greenery. This turned out to be the first true recovery in the suburban property market since the financial crisis of 2007.
Current property trends
But house prices growth reached its peak in the summer and should level out as people return to the offices, according to data by Hamptons.
By the end of this year, the average house prices in Britain will be 4.5% higher than at the beginning of 2021, with London property seeing an increase of 1.5%.
Aneisha Beveridge at Hamptons highlights the unpredictability of the housing market in the UK. This time last year, there were no signs of such an «extraordinary demand for relocation» we see in 2021.
She also highlights new priorities of people regarding the property that are not only because of the stamp duty holiday. People value their space now, spend more time at home and implement remote work.
The UK and London house prices in 2021 and beyond
Across the UK, houses are expected to become 3.5% more expensive in 2022, with North, Wales and Scotland seeing the most rapid price growth. Increasing salaries and remaining low interest rates will contribute to this trend.
As for London, experts forecast house prices growth to lag behind the rest of the UK with just a 1% price growth in 2022. But the annual growth rate will reach 3% by 2024 and outperform the rest of the country.
The experts predict the houses in Great Britain to cost 13.5% more from 2020 by 2024. A similar figure for Greater London stands at 7%.
Beveridge says the current lagging prices growth rates in London are usual for this property cycle. The pandemic has «aggregated» the trend as people began to relocate to the suburbs with more affordable and spacious new homes. Slow growth rates in the London property market are because of the low affordability and high price tags.
She expects the Central London property market to gather momentum again by 2024 as international demand returns to the city. However, the «bounce back» will not be as dramatic as after the financial crisis.