Residential property prices are set to increase next year

News at Cloud9 Estate Agents | 14/12/2020

Residential property prices are set to increase next year, according to Rightmove’s latest house price index.

The site forecasts a 4% rise in 2021, which will come as a surprise to those agents who exect the market to slow once the strap duty holiday deadline expires on 31 March.

Rightmove said that while the stamp duty holiday “added extra momentum”, buyer demand was already high before the holiday was announced by the chancellor Rishi Sunak.

Buyer demand is currently up 53% year-on-year.

Tim Bannister, Rightmove’s director of property data, said: “Our 2021 forecast of a 4% price rise is more conservative than the unsustainable 6.6% national average seen this year.

“There’s likely to be a lull in quarter two unless the stamp duty holiday is extended, but for many buyers its removal will not be make or break, though may lead them to reduce their offers to a degree to compensate for the higher tax, and indeed many sellers may be prepared to help to mitigate their buyer’s financial loss.

“First-time buyers will remain largely exempt, so in most cases will be no worse off.

“The maximum savings of £2,450 in Wales or £2,100 in Scotland are considerably less decisive than the £15,000 available in England for a house costing £500,000 or more, which does however only apply to a small part of the market.”

Some 130,000 sales were agreed over the last month, up by 44% on the same period in 2019, Rightmove said.

Bannister added: “Interest rates remain at near-record lows, and we expect greater availability of low-deposit mortgages at competitive rates next year.”