- Average values in UK up +5% y/y, according to Nationwide
- Average prices of country homes now up to $291,784
- Average prices in London now up to approximately $600,000+, a record high
- Price growth projected at +20.4% across the UK over next 5 years, according to Savills
Buyer demand in both prime central London and UK homes in the country has been driving average home values up +5% annually in September.
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According to a recent report by Nationwide, a bank and mortgage provider, the average price of a home in the English countryside is now $291,784. In prime central London, the average price of a home is +$600,000, both record highs and +57% above peak prices back in 2007.
According to Robert Gardner, Nationwide’s chief economist, “Housing market activity has recovered strongly (from both the prior uncertainty of Brexit and from the COVID-19 pandemic and its subsequent lockdowns) in recent months.”
The data backs up Gardner’s statement. The typical monthly average of mortgage approvals for home purchases in 2019 was 66,000. Mortgage approvals for home purchases during August 2020 totaled nearly 85,000.
Gardner went on to say, “The rebound reflects a number of factors. Pent-up demand is coming through, with decisions taken to move before lockdown now progressing. The stamp duty holiday is adding to momentum by bringing purchases forward. Behavioral shifts may also be boosting activity as people reassess their housing needs and preferences as a result of life in lockdown.”
Nationwide data also indicated that some 10% of consumers surveyed for this latest report indicated they were in the process of moving due to the pandemic. Another 18% of survey respondents indicated they were “strongly” considering making a move due to the pandemic.
Savills, the well-regarded estate agency based in London, is optimistically projecting price growth across the UK to total +20.4% over the next five years. Lucian Cook, head of residential research at Savills, said, “The pace of change in the UK housing market has taken us all by surprise over the past few months, suggesting normal rules simply don’t apply. While we clearly can’t ignore the economic backdrop, other factors, including a stamp duty holiday, have unleashed an unexpected wave of activity in the market and added to the pent-up demand coming out of lockdown.”
The surge of buyer demand has translated into higher levels of contract closings thus far this year. Savills now expects transactions to exceed 1M in 2020.
Wales is projected to have the most prosperous 2020 among UK areas. According to Hamptons International, home prices in Wales are set to increase +3% while home prices in London are set to increase +2.5%.
With government support measures set to expire and unemployment forecast to peak, 2021 is projected to be a more challenging year. Hamptons International is forecasting prices to drop -1.5% in the West Midlands and -1% in London.
Thanks to MansionGlobal.