10 Jan What happened in the property market in 2021?
Despite the pandemic, the property market continued to move in 2021. Thousands of families purchased their first home, moved up the property ladder, or decided to invest in property during the year. Here are a few of the key events and figures that highlight what happened in the property market in 2021.
A Stamp Duty holiday helped support the property market
There were concerns that Covid-19 restrictions would lead to the property market stalling. To combat this, the chancellor introduced a Stamp Duty holiday in England and Northern Ireland in July 2020, and, after an extension, it finished in September 2021. Scotland and Wales also introduced similar temporary reductions when buying property.
The holiday meant that homebuyers could save up to £15,000 when buying a home. The threshold for paying Stamp Duty temporarily increased to £500,000, compared to the usual £125,000, so fewer families need to pay the tax. It encouraged more people to consider moving while they could reduce the associated costs. According to Which?, around 1.3 million buyers benefited from the holiday across the UK.
The organisation also estimates that the holiday led to sellers hiking property prices by more than £16,000 as buyers clamoured to find a property. As a result, the Stamp Duty holiday is associated both with increased demand and rising prices.
2021 was the busiest property market since 2007
The Stamp Duty holiday helped to make 2021 the busiest property market in almost 15 years.
According to Zoopla, by the end of 2021, 1 in 16 homes had changed hands, making it the busiest property market since 2007. Homebuyers in 2021 may have experienced delays in the process, from mortgage applications to solicitors, as professionals in the industry dealt with higher demand alongside the pandemic restrictions.
House prices continued to climb
Rising property prices have been making headlines over 2021. With demand rising and the Stamp Duty holiday placing pressure on home buyers, it’s no surprise that prices increased in line with this.
In November, the average UK property prices reached £270,000 for the first time according to the Halifax House Price Index. In the three months to November, prices increased by 2.3%, while over the year they had increased by 8.1%. Wales, Northern Ireland, and Scotland have outperformed the UK average in terms of property price growth.
The pandemic affected what home buyers were looking for
The pandemic and the associated restrictions led to a shift in what home buyers were looking for in a dream property.
Reflecting a wider trend for working from home, the Zoopla data shows there has been greater demand in commuter zones and more rural areas. With the freedom to work anywhere, workers are increasingly searching for a home with a local area that meets their needs without having to contemplate work opportunities as much.
In addition to this, larger homes with outdoor spaces were in demand after lockdown restrictions meant people were forced to stay in their homes. Home offices and larger living spaces have also become key features home buyers are looking out for. With people appreciating the space their homes offer more, it could change which types of property are in demand in the future.
What will 2022 hold for the property market?
There’s no consensus among property experts about what 2022 will mean for the property market. However, according to a report in the Guardian, demand for property is set to continue driving up property prices, albeit at a slower pace. It is estimated that property values will increase by up to 3.5% a year between 2022 and 2024.
If you’re looking to purchase property this year, whether as a home or as an investment, working with a mortgage broker can help you access a mortgage with a competitive interest rate and the flexibility you want. If you’d like to talk to one of our team, please contact us.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.