Will House Prices Drop in 2021?
The question that everyone in the UK has been asking: Will house prices drop in 2021? The housing market has been buoyant this year to say the least. UK house prices reached a record high this August with an increase of 0.7% in the month alone (source: Halifax Banking).
So why are we seeing this rise? Will it come to an end? And has there ever been a better time to buy? All will be revealed within this very blog…
The first point to note is that we cannot pin point this excited market on just one sole factor. The rise in house prices is no doubt being fuelled by many elements.
Firstly, economic factors: the readily available finance at such preferential rates; sustained low interest rates; job security; wage inflation; the scarcity of property available to buy and the basics of a free market where supply and demand are out of kilter, are all adding to the market rise.
Social elements also come into play here, of course because of the fact that people have spent such a long time at home, more than any other time. Pre-lockdown, most people would leave home in the morning for work and not return back until early evening, maybe a quick turn around and back out for exercise, food or meeting friends, then home for bed and off to work again. Weekends were always busy, looking after children’s multiple activities or out socialising, then repeat the work cycle again!
With a very low unemployment rate, public confidence is inevitably high. There is definite pressure on wages to increase and with a number of people not going abroad, they are in general, feeling wealthier. Having all this extra time and disposable income on our hands has only meant one thing for the enthusiastic DIY experts out there- major home improvement! Of course with significant investment, there comes value, which in turn has pushed many of us to sell.
When people say history repeats itself, they are most definitely not wrong. Since the end of the second world war, the overall trend for house prices, has been upwards. During that period, there have been peaks and troughs, but the key to investing in property, is making sure that you do not have to sell at the wrong time. If you can afford to hold on, history supports the fact that the market will return, prices will rise to a figure greater than you paid. In a rising market, there is no better time to buy!
All these factors do point to the market continuing to rise throughout 2021. There will undoubtedly be a correction at some point, but we are not predicting this in the short to medium term.
We are commenting on the area in which we operate, which is centred around tHarrogate, in the golden triangle. Within this area, demand is generally strong due to our beautiful countryside, excellent towns and cities with numerous locations appearing in the top 10 list of places to live.
If you have any questions, would like some advice or need to speak to our experts about any property related topic then please do not hesitate to get in touch!
T: 01423 501211