According to Bank of England, net mortgage lending hit a record in March 2021. Every month, figures from the main housing market barometers, Halifax and Nationwide, report further annual increases in house prices.
But what are the factors driving this ‘boom’? And how long will they remain in place?
From our perspective, we have certainly seen an increase in asking prices across the areas we cover: Lancashire, Cumbria and the Yorkshire Dales; with houses getting snapped up quickly. Demand is outstripping supply in many cases, with homes selling for above asking price on a regular basis.
Coinciding with the reported demand in people seeking more rural homes, we are seeing lots of buyers from outside of the area – often relocating from down south or from more urban areas of the North West and even buyers who are moving back to the UK from abroad.
The Stamp Duty holiday has certainly been a key driver – prompting people to move sooner rather than later to take advantage of the ‘saving’.
The Covid effect and what people are looking for in a home has also been a considerable contributing factor. Whilst a large percentage of the population have become accustomed to working from home, how long this will last once restrictions further ease will remain to be seen. The pandemic has forced the hand of many businesses when it comes to remote working and ‘hybrid’ working, with a blend of office-based and home-based working weeks, may become the new norm. Even this one or two days of home working per week will make a big difference to the perception of the commute for many, leading to a continued drive for larger homes in the suburbs or more rural locations.
As people move out of city centres or more urbanised locations, perhaps with a view to gaining more outside space and a dedicated home-working space, there is also the impact of being able to afford more, and therefore putting in higher bids for homes that might previously have been driven for a harder bargain. This is particularly likely to be the case for those moving from the south up to northern locations, where the perceived ‘value for money’ available is driving prices ever higher.
The sheer level of demand for houses in the mid to higher range bracket means that motivated buyers will need to make themselves the most attractive bidder – either by being willing to pay over the asking price, or else being in a string position without a house to sell/having a chain.
Then, perhaps the biggest factor of all; the availability of cheap credit. With interest rates remaining at historic lows, we have the perfect storm of rising mortgage availability and low mortgage rates.
The big question is…how long will it all last? Following a boom, there is always going to be a point of decline. However, with the government still keen to buoy the economic recovery post-pandemic, it seems unlikely that they will want the feel-good factor of a booming housing market to disappear any time soon.
Our team represent house buyers – providing independent, impartial advice.
For more information about our residential property services, including RICS Homebuyer Report, Building Survey Report or Valuation Report, please contact us.
