And just like that, quarter 1 is done. It feels like 2021 is moving a lightning pace, and so is the property market it seems, with house price growth, showing no signs of losing momentum and buyer demand continuing to outweigh supply in almost every region across the UK. This summary will shed a light on the key trends and metrics of 2021 so far.
The latest up to date official figures from The Office For National Statistics & HM Land Registry provide us with data from the first month of 2021.
HOUSE PRICES - Latest UK House Price Index (January 2021)
The UK HPI is based on completed housing transactions. Typically, a house purchase can take 6 to 8 weeks to reach completion. Therefore, the price data feeding into the January 2021 UK HPI will reflect sales agreed in November.
- Average Price UK £249,309 - January 2021
- Annual Price Change 7.5% - January 2021
- Monthly Price Change -0.5% - January 2021
- London Average Price = £501,320 - January 2021
- London Annual Price Change = 5.3% - January 2021
- London Monthly Price Change = 0.1% - January 2021
HOUSE PRICES - HALIFAX HPI (April 2021)
The Halifax HPI provides us with more recent house price data (from mortgage approvals)
The Halifax House Price Index is the UK's longest running monthly house price series with data covering the whole country going back to January 1983
The Halifax uses its own database of approximately 300,000 mortgage approvals per annum (ca. 25% of all mortgages) as a basis for its monthly house price reports. Because it uses approved loans rather than completed mortgages, the Halifax can obtain data earlier than the Land Registry
- Average Price: £254,606 - March 2021
- Annual Price Change: +6.5% - March 2021
- Monthly Price Change +1.1% - March 2021
TRANSACTIONS (February 2021)
(Transactions involving the creation of a new register, such as new builds, are more complex and require more time to process)
- Estimated number of UK residential transactions, 147,050 - February 2021
- Annual Transaction Volume Change = 48.5% increase - February 2021
- Monthly Transaction Volume Change = 23% increase - February 2021
RENTAL MARKET (March 2021)
Data is gathered from our tenant referencing service, and our rental amounts are based on actual achieved rental prices with accurate tenancy start dates in a reported month, rather than advertised costs (HomeLet)
- Average rent in UK = £922
- Annual Variation for the UK = +3.4% (year on year)
- Average rent in London = £1586
- Annual Variation for London = -5.2% (year on year)
- Household Rent To Income Ratio UK: 30%
- Household Rent To Income Ratio UK: 34%
“With almost 1 in 5 people living in the private rented sector, it’s fitting that the Government should focus on it, with an informed policy that strives to achieve a balance between letting agents, landlords and their tenants, but unfortunately that isn’t the case at the moment. The continued increase in rents above the rate of inflation is a symptom of current policy” - Homelet
- At the moment, rates in the remortgage charts remain highly competitive, making this a good time for homeowners to remortgage
- Those looking to take their first step onto the property ladder will be pleased to see that lenders are continuing to re-enter this market.
- Figures due to be published in the Moneyfacts UK Mortgage Trends Treasury Report show that there are 3,532 mortgage deals available in March, this is the highest there have been since March 2020 when there were 5,222 deals available.
- Borrowers looking to get a mortgage deal may want to consider acting sooner rather than waiting, as figures show that average mortgage rates on both two and five year fixed deals have continued to rise, with the average two year fixed rate now at its highest level since June 2016
The March 2021 Budget confirmed that the government will be incentivized banks to offer 95% mortgages with the likes of HSBC, Natwest & Barclays already confirmed to be taking part
The scheme will not be restricted to new build properties nor will it be restricted to first time buyers, but will come with a £600,000 price cap
The March 2021 Budget also confirmed an extension to the stamp duty holiday
This means that home buyers will pay no stamp duty on purchases up to £500,000, so long as they complete before the end of June
In an attempt to avoid a cliff edge end to the holiday, from the end of June, the government has announced that the threshold will be reduced to £250,000 until the beginning of October, when it returns to its original level of £125,000
The new Help to Buy scheme has officially launched, replacing the previous version of the scheme which has run since 2013
As of April 2021 regional price caps now apply and the scheme has been restricted to first-time buyers, with the entire scheme due to end in 2023.