- According to Rightmove, UK housing market seeing “drastic discrepancy” between supply and demand
- Bolstering demand pushed home prices up +34% from one year ago
Unabated UK Buyer Demand Spurs Soaring Home Prices
Homebuyer demand in the United Kingdom has rendered its housing market completely unbalanced. Rabid pent-up demand opened the year and now, a “frenetic” spring housing market has spurred a “drastic discrepancy” between supply and demand, according to a recent report by Rightmove.
With this drastic discrepancy, home prices have increased +34% from one year ago. Tim Bannister, Rightmove’s director of property data, said, “Concerns of a cliff edge for the housing market at the end of March have dissipated, partly due to the tax deadline extensions (of the stamp duty tax) in all of the UK bar Scotland, but also because the already high level of buyer demand caused by the lockdowns has continued to surge since the start of the year.”
More Demand Anticipated
In April, Bannister expects even more demand on UK residential property as the government has guaranteed buyers that lenders are “to bring back” 5% deposit mortgages.
Bannister said, “Record low interest rates and the new focus on what your home needs to offer after several lockdowns have led us to the greatest excess of demand over supply in the last ten years.”
London Also Considered Destination of Choice for Affluent Hong Kongers
Hong Kong residents have been looking to buy in London for the last year. And, as political crackdowns by the Chinese in Hong Kong have become more and more aggressive, interest from Hong Kongers in London is only increasing. Some of these Hong Kong residents are buying in anticipation of a possible permanent relocation.
According to Paddy Brewer, a spokesman from the immigration firm Henley & Partners, “The reason that high-net worth (Hong Kong) individuals started looking for optionality…is they could see the political changes coming, the volatility coming.” Additionally, Brewer said they “…can make more money while diversifying their links to Hong Kong.”
Savills Group Forecasting UK House Prices to Increase +21% Over Next 5 Years
Meanwhile, Savills just released its latest forecast on UK home prices. It is expecting an increase in home prices of +21% over the next five years
Savills expects the average home price in the UK to rise +4% in 2021. Deals for homes could reach 1.4M in 2021 but then return to normal activity leaves, 1.2M annual transactions, by 2023.
Thanks to MansionGlobal.
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