Prices continue to rise in the UK housing market

The latest Nationwide research shows UK house prices rose by 7.1% compared with a year ago, with the average property price rising by £15,916 in the last year, to reach £238,831.

Lockdown savings have allowed first-time buyers to be in a better place to afford a home; however, as demand continues to outweigh supply, house prices continue to rise.

Nationwide figures showed that in April, house prices rose sharply up by 2.1% compared to March.

We have seen a year-on-year price growth acceleration in England, Wales, and Northern Ireland, driven by factors such as the stamp duty holiday and the demand for more space, led by reassessment of people’s domestic set-ups the pandemic.

“Our research suggests that while the stamp duty holiday is impacting the timing of housing transactions, for most people, it is not the key motivating factor prompting them to move in the first place,” said Nationwide’s chief economist, Robert Gardner.

Amanda Collison, at PropertyMarket-Index.com said: “People are looking to properties by the coast for the quality of life, fresher air, more space and a family-friendly appeal. The trend has only accelerated since our Coastal Property Markets for London Buyers, ‘Londoners by the Sea’ Index Report.”

And she added that with the stamp duty holiday extension and reintroduction of 95% mortgages, PropertyMarket-Index.com expects to see further high demand for properties in the popular coastal areas.

Nationwide figures were based on its own mortgage data and predict the market to remain busy for the next six months, with price growth continuing to accelerate as demand continues to exceed the supply of homes on the market.

For first time buyers, this may be seen as bad news. However, with the help of their families, the building society said some would be better positioned with the money they have saved during the pandemic.

A typical first-time buyer would need to save £19,500, or around 50% of their gross earnings, for a 10% deposit on a mortgage, Mr Gardner said.

“The fact that around a third of first-time buyers in England in 2018-19 said that friends or family helped them to raise a deposit through a loan or gift suggests that the recent surge in savings will help some, but that the impact won’t be spread evenly,” he said.

Nationwide described the longer-term outlook for the housing market as more “uncertain”.

“If unemployment rises sharply towards the end of the year as most analysts expect, there is scope for activity to slow, perhaps sharply,” Mr Gardner said.

Nicky Stevenson, managing director at estate agent Fine & Country, said: “Numbers like this won’t last forever, but the market may not begin to unwind until the busy summer season is out of the way.”