UK house price growth hits two-and-a-half-year high

·2 min read
Restored Victorian red brick houses with colored doors on a local road in London, UK
Record high sales agreed post-lockdown means there are 50% more homes currently in the sales system than this time last year. Photo: Getty

A surge in demand for housing over the summer as the UK began to transition out of the nationwide coronavirus lockdown has translated into higher house price growth.

The growth rate for UK house prices has hit is 3%, up from 1.1% a year ago — the highest rate since April 2018, according to the latest Zoopla house price index.

Record high sales agreed post-lockdown means there are 50% more homes currently in the sales system than this time last year. This equates to a total of 418,000 properties worth £112bn ($146bn) — 140,000 more sales than a year ago.

READ MORE: Calls for UK stamp duty extension as 325,000 buyers 'set to miss deadline'

Between July and October, agreed sales rose by 40% to 60% compared with the same period in 2019, reaching an annual high in August, peaking at a 62% year-on-year uplift.

Demand for homes is currently 40% higher than it was in 2019, but it has slowed back to pre-COVID levels seen in early March, Zoopla said.

Despite slowing demand, house price growth is expected to increase further towards 4% over the next two to three months, according to Zoopla.

WATCH: What do stamp duty cuts mean for buyers and house prices?

Zoopla put the uplift down to buyers rushing to meet the stamp duty holiday deadline on 31 March 2021 but warned those keen to beat the deadline should agree a sale before Christmas as just a quarter of sales agreed early next year will complete by 31 March in a normal year.

It is currently taking an average of just over 100 days from sales agreed to completion but the volume of business means this could increase in the short term “creating operational pressures on agents, lenders, valuers and conveyancers,” according to Zoopla.

Richard Donnell, research and insight director, Zoopla, said: “There is a sizeable pipeline of business for the property, lending and conveyancing industry to convert into completed sales before Christmas and into Q1 2021.

READ MORE: Coronavirus pandemic shifts London property hotspots on tube lines

“The stamp duty deadline will focus the minds of committed movers in the near term, which will support sales volumes and make for a strong first quarter of sales completions in 2021.

“Those who leave it to January to start their search for a home will be cutting it fine — just half of sales agreed in January will convert into a completed sale by the end of March so those looking to beat the stamp duty deadline will need to be well prepared.

“Finding an agent before Christmas and instructing a conveyancer to prepare all the sellers legal information will be essential to boosting the chances of saving up to £15,000.”

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting