House prices set to rise in 2021

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House prices set to rise in 2021 Posted On 16 December 2020

Rightmove’s latest house price index shows a property price increase next year

Residential property prices are set to increase next year, according to Rightmove’s latest house price index. The property portal forecasts a 4% rise in 2021, which has surprised some who expected the market to slow after the expiry of the Stamp Duty Holiday on the 31^st March.

However, Rightmove said that while the Stamp Duty Holiday ‘added extra momentum’. Buyer demand was already high before the holiday was announced. Currently, buyer demand is up 53% year-on-year, and with the lockdown effect, it seems people will be moving in record numbers in 2021 regardless.

The lockdown effect is still being felt in the property market, with a surge in demand for properties in rural areas and with additional garden space. The pent-up demand from the first lockdown is still being felt too. Some 130,000 sales were agreed last month, up by 44% on the same period in 2019.

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

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