UK house prices predictions: busiest December in decade - followed by slowdown in 2021
Zoopla forecasts that only 50% of sales will complete before end of stamp duty holiday
A rush to complete property deals before the end of the stamp duty holiday will result in the busiest December for the market in more than a decade, according to Zoopla.
In its latest UK House Price Index, the property website predicts a “seasonal spike in demand” that will continue into January as buyers rush to complete sales before the tax break ends on 31 March.
More than 100,000 additional house sales are expected during the first three months of 2021, The Guardian reports. However, Zoopla warns that only around “50% of sales agreed in January will make it” to the finishing line before the stamp duty holiday deadline.
“Beyond that, we expect demand to slow as the impetus to move for stamp duty savings dissipates for a portion of would-be buyers,” the experts add.
Demand for housing fell to below pre-Covid levels ahead of the ongoing lockdowns in England and Wales, but remains 34% higher than in the same period last year. And completed sales for the whole of 2020 are expected to be just 6% lower than 2019, despite the fallout from the pandemic.
Describing the year as a “rollercoaster”, Zoopla said: “There was a sharp dip as the latest lockdown in England was announced, which rebounded once it began. High demand, and more available supply, has boosted the number of sales agreed, currently running 38% higher than a year ago, adding to the sizable pipeline of business moving towards completion in 2020 Q4 and 2021 Q1.
“We expect sales agreed to run above average in the weeks ahead.”
Uncertain times ahead
UK house prices rose by 3.5% year-on-year to reach an average of £223,500 in October - the highest rate of increase for almost three years. House price growth for the whole of 2020 is expected to hit 4%, before slowing to 1% by the end of next year.
Factors including progress on Covid-19 vaccines, unemployment levels and the outcome of Brexit deal talks will shape the housing market outlook in 2021, with the pandemic “adding to the uncertainty”, says Zoopla.
But such uncertainty aside, “we expect completed sales in 2021 to be in line with 2020 levels at 1.1 million”, the experts predict.