Rightmove has forecast average asking prices rising 4% across the UK in 2021 as people place housing ahead of economic uncertainty.

Average asking prices from sellers is expected to rise by 4% in 2021 according to property agent Rightmove as housing is prioritised ahead of an uncertain economy by home movers and first time buyers.

In 2020 asking prices have increased by 6.6% or £19,920 with average property values of £319,945 due to pent up demand after lockdown and with an extra boost from the stamp duty holiday.

There has been a strong rise for the North West with average asking prices up 10.6% year-on-year, the North East is higher by 9.1% and Yorkshire and Humber with a rise of 8.8%.

There remains 650,000 properties in the system including 130,000 with sales agreed over the last month an increase of 44% on the same period last year.

London asking prices increase

Of the 32 boroughs in the capital 26 had higher asking prices than a year ago with a strong rise in the borough of Haringey up 10.6% or £62,273 and average property values of £649,760.

This table from Rightmove shows the highest annual change of average asking prices for the top ten London boroughs to December 2020.

Borough	Asking price	Annual change
Haringey	£649,760	10.6%
Kingston upon Thames	£631,234	7.9%
Greenwich	£466,291	7.6%
Lewisham	£491,756	7.4%
Brent	£587,409	6.3%
Sutton	£488,373	5.9%
Waltham Forest	£507,545	5.9%
Harrow	£576,969	5.7%
Richmond upon Thames	£852,112	5.5%
Croydon	£451,034	5.5%

Other boroughs average asking prices have improved over the year are Kingston upon Thames up 7.9% or £46,216, Greenwich higher by 7.6% or £32,935 and Lewisham up by 7.4% or £33,882.

The extra value for properties in these boroughs offers the equity release buyer access to cash using a lifetime mortgage which can be used to maintain their lifestyle, holidays or home improvements.

Not every borough has seen asking prices improve and for Tower Hamlets these have reduced by -4.6% and the most expensive borough Kensington and Chelsea has seen prices lower by -1.0% compared to this time last year.

For first time buyers in London the higher asking prices may force them to continue renting although they can consider the Help to Buy scheme or Shared Ownership to progress on the property ladder.

High buyer demand continues

There has been a surprising level of buyer demand despite the pandemic lockdown and impact on the economy and Rightmove expects this to continue in the first quarter of 2021.

This demand has seen first time buyer average asking prices rise 5.8% over the year with property values of £201,037 and second steppers up 7.0% with values of £290,517.

Higher property values can allow existing buy-to-let landlords to increase their existing mortgages, raising the deposit to buy another property.

Demand is likely to slow in the second quarter as the stamp duty holiday ends on 31 March 2021 and this has driven an increase in home movers especially for expensive homes.

The lower mortgage rates for those with a large deposit or equity offers scope for a modest rise in asking prices as there remains some affordability headroom especially as demand has exceeded supply in 2020.

What are your next steps?

Talk to our London City Mortgage advisers if you are an older homeowner releasing equity from your property, we can recommend the lifetime mortgage to access wealth to consolidate debt, home improvements or gifting to a family member.

Start with a free mortgage quote or call us and we can take your details. Learn more by using the equity release calculator, property value tracker chart and mortgage monthly costs calculator.

At LCM our mortgage brokers can provide advice if you are a first time buyer, moving home, want to remortgage your existing home to a new cost effective mortgage deal or are a buy-to-let investor.