One in 16 homes in the United Kingdom will have changed ownership in 2021.
UK Housing Demand, Pricing and Sales Up in October
With demand, prices and sales up in October, the UK is on track to deliver its strongest housing market since 2007. Between October 2020 and October 2021, according to the latest Zoopla UK House Price Index Report, one in 16 homes will have changed hands by the end of this year. If realized, this would make 2021 the UK’s busiest year for housing transactions since 2007.
UK home prices increased nearly +7% m/m in October. The average home price hit L240,000 or US$319,161, according to Zoopla. On an annual basis, UK home prices increased approximately +15%.
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Supply and Demand Imbalances Drove Home Price Increases
As in every housing market across the globe, price increases in the UK continued to be driven by the combination of rising demand and shrinking inventory.
In mid-October, demand in the UK was up +19% above the country’s five-year average. Total inventory of for-sale housing stock for was -40% below the five-year average, all according to Zoopla.
Light at the End of the Tunnel in 2022?
Zoopla’s analysts are expecting an increase in UK’s inventory after the holiday season. Zoopla’s head of research and author of this latest report Grainne Gilmore said, “New supply will start to rise at the turn of the year as households use the holiday period to make a decision around making a move.”
Building upon data indicating that home price growth slowed slightly from August and September and, that quarterly home price growth in October slowed to 1.2% compared to July’s 2.8% growth, Gilmore said,” House price growth is starting to ease, although the path over the next year will not be linear. We expect UK average price growth to end 2022 firmly in positive territory at 3%.”
Three Northern Cities in the UK Saw Steepest Home Price Growth
October’s home price growth was the steepest on a year-over-year basis among three northern cities:
- Liverpool – +10.6%
- Manchester – +8.7%
- Sheffield – +7.9%
At +10.8%, Wales saw the highest regional rate of house price growth.
Thanks to MansionGlobal.