After the end of tapered stamp duty demand for property is historically high with low supply pushing house pieces to new highs.
Demand from home movers and first time buyers continues at a historically high level with no evidence of change despite the end of tapered stamp duty in September, according to Zoopla.
House prices are up 6.1% annually to August 2021 compared to 2.8% at this time last year with average values across the UK of £235,000.
The ending of the stamp duty holiday at the end of June reduced overall sales, however, an imbalance between demand and supply has put upward pressure on house prices.
Compared to a year ago demand is 18.7% higher for property compared to stock of homes for sale down -28.1% and flow of new supply down by -4.7%.
Regional cities with strong house prices
Even though the lockdown is driving buyer behaviour with home movers searching for space, city living is still popular with Liverpool house price growth up 9.7% in twelve months.
The latest table from Zoopla is for the leading ten city house prices and growth over the year to August 2021.
| City | Current price | Annual growth |
|---|---|---|
| Liverpool | £137,600 | 9.7% |
| Manchester | £195,100 | 8.1% |
| Sheffield | £153,400 | 7.6% |
| Belfast | £151,200 | 7.4% |
| Nottingham | £175,800 | 7.3% |
| Leicester | £201,000 | 7.0% |
| Leeds | £185,900 | 6.5% |
| Bournemouth | £309,100 | 6.3% |
| Cardiff | £228,900 | 6.1% |
| Birmingham | £182,300 | 5.8% |
Property values in Liverpool are £137,600 which is much lower than the national average and less than half that of the Zoopla 20 city index of £271,700.
There has been strong growth for properties in Manchester rising 8.1% over the last year, Sheffield higher by 7.6%, Belfast up 7.4% and Nottingham rising 7.3%.
Higher house prices can benefit the equity release buyer where low provider fixed interest rates can make it cost effective to access cash using a lifetime mortgage for home and garden improvements.
London has the slowest growth in house prices rising 3.0% for the year ending August 2020 and only up 2.3% this year which is less than inflation
This is due to the lack of affordability in the capital as the average value of homes is £493,400, the lack of international travel and people leaving to the commuter zone for an alternative work environment.
Buyer demand in London is reversing as offices reopen with demand in the capital up 14% last month, in particular for houses demand has increased 25% but only by 6% for flats.
Property market moving quickly
The property market is not on a cliff-edge as many expected after the end of the stamp duty holiday as the time taken to sell a home is faster than ever at only 27 days compared to 50 days in January 2021.
There remains a lack of sully of new properties and this may result in an increase in the time to sell during the last quarter of the year.
Housing stocks may be supported by buy-to-let landlords selling their portfolio with 8% of properties having been rented out in the last three years compared to 3% two years ago.
Buyer demand is 35% higher in mid-September 2021 compared to the five-year average which shows the stamp duty holiday has made little difference and therefore is not the main factor driving demand.
Rather than moving for more space, the remortgage buyer can benefit from low interest rates under 1% to release capital to build an extension or loft conversion.
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As market activity returns to more normal levels, Zoopla expects the stock of property to rebuild in early 2022 although house price growth is likely to be lower than the current 6.1% per year.
What are your next steps?
Talk to our London City Mortgage brokers for advice if you remortgage your existing home and need a leading mortgage deal. Learn more by using the property value tracker chart and equity release calculator.
Start your free remortgage quote and we can find competitive mortgages and low rates for your home at this link:
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To release equity from your property to repay an existing loan and release cash, we can recommend lifetime mortgages so begin your equity release quote for the best provider offers.
