Figures released by Zoopla today reveal that house prices are up 4.1% in April – up from 2.3% in April 2020. House price growth is the highest in areas of with the most affordable property. The lowest rate of growth in the UK is in London at 1.9%.
This rise in house prices is a result of demand outstripping supply especially for three- and four-bedroom family homes.
On a regional level, the prices of houses in Scotland rose by nearly 11% in the year to March 2021 – the highest price inflation in 14 years, up from 8.3% in February (ONS).
According to Zoopla, this level of price growth comes as buyer demand in these cities in April was running at double levels in 2017 and 2019, with a 10+% decline in the properties available to purchase.
Family homes are in high demand and this is putting upward pressure on the prices for these properties with multiple competing offers, fast sales times and a large number of families missing out on property to purchase. Average prices for houses are 5.2% higher this year compared to 1.1% for apartments and flats.
Demand is starting to level out as restrictions ease as the economy opens up again, people start going back to work and schools are experiencing more ‘normality’. As we approach the summer, we are also seeing a rise in supply of family homes as people look to move before the autumn school term. However, Zoopla believes that demand will be elevated compared to the normal market levels seen in 2017 and 2020.
Although the break in LBTT boosted market activity and got the property market moving again, it is the reassessment of buyer’s priorities that is creating this lasting change in the market and an upsurge in demand.