UK Property Market Update July 2021

Average house prices increased by 1.3% in Q2, with an annual growth rate of 5.4%, up from 2.2% in June last year.

London continues to fall behind the major northern cities with growth of 2.3% compared to 7.4% in Manchester.

Despite the end to the Stamp Duty Holiday, demand from buyers remains high and supply of new properties to the market is still insufficient, keeping upward pressure on property prices.

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UK House Price Inflation

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The average property price increased by 1.4% in the three months to the end of July, with an annual growth of 6% compared to 2.3% annual growth in July 2020.

The highest level of house price growth has been seen in more affordable areas, with Liverpool continuing to lead with the highest level of price growth:

‍Liverpool price growth of 9.4%
Manchester price growth of 7.7%
London price growth of 2.3%

As expected, the level of growth has been moderate for July, which was the month immediately after the Stamp Duty holiday came to an end.

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Highlights

Property price growth of 6% year-on-year
Supply of property to the sales market is 26% below 2020 levels
Property price growth expected to peak at 6% year-on-year

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High Levels of Demand for UK Property

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Sales agreed are running 21% above the levels in the same period of 2018 and 2019.

The level of sales activity meant that 1 in 20 properties were sold over the past year, compared to 1 in 25 in the previous two years.

The First Time Buyer market remains very active, accounting for approximately one third of buyers. Lenders have reversed their decision to charge higher interest rates on high loan-to-value loans, which in addition to the government back scheme allowing mortgages up to 95% of the purchase price has fuelled the First Time Buyer market.

Property investors also took advantage of lower rates of stamp duty land tax with demand from buy-to-let investors up by 21% on 2020.

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Low Supply of Properties for Sale

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The supply of properties to the market is still 26% below 2020 levels, with the flow of new supply of homes for sale 5% down on average levels.

Compared to 2018 and 2019, the total stock of properties for sale is down by 33%.

This level of supply of new properties for sale is insufficient to refresh the properties being sold, as they are being sold so quickly.

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Property Market Outlook for 2022

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The property price growth will continue to be fuelled by the lack of supply to the market, with the first half of 2022 expected to see strong levels of growth.

The First Time Buyer market will continue to be active in addition to those who are looking for a property with more space who have been unable to find a new home over the past year due to low supply.

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Is Property Still a Good Investment?

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The 21% increase in demand year-on-year from buy-to-let property investors is a good signal that investing in a rental property is still a great opportunity.

Property investors who look for property in areas where high price and rental growth are forecast will do exceptionally well. Regency Invest help property investors do just this, by securing below market value property and excellent buyer incentives for developments that are that are under construction.

Speak with one our advisors today by completing our quick and easy 60-second questionnaire and we will be in contact with a variety of options that meet your investment criteria.

Explore our range of buy-to-let property investment opportunities in the North West of England where prices are forecast to see price increases of 28% by 2025:

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